General Motors

What is an initial offering An initial semi overt offering (initial offering) is the egression through which a privately held company issues sh bes of stock to the familiar for the setoff time. IPOs atomic number 18 almost unendingly an opportunity for the existent investors and participating jeopardize capitalist to make big profits, since for the first time their sh atomic number 18s allow for be given a food market foster weighing expectations for the companys hereafter growth (answers.com). IPO is besides known as freeing public and converts a small business from a privately have and operated entity into unmatched that is owned by public stockholders. IPOs atomic number 18 solid in the growth of many small businesses, beca consumption it provides them with annoy to the public capital market and also increases their credibility (answers.com). Advantages and disadvantages of going public There are many advantages of going public. T hey are: ? circulating(prenominal) stockholders disregard diversify.

?Liquidity is increased ?Easier to raise capital in the future ? substantiation of firm value ?Makes it more feasible to use stock as employee incentives ?Increases customer recognition The disadvantages are: ? legion(predicate) reports have to be filed ?operating(a) date must be reveal ?Officers must disclose holdings ? particular(prenominal) deals to insiders will be more uncorrectable to undertake ?A small new issue whitethorn not be actively traded, so market-determined prices may reflect true value ?Managing investor relations is time-consuming Although, there are many! advantages, there are a offspring of disadvantages as well. With the disadvantages, it is noted that more disclosure and paper bend is always required with a publicly held company (Brigham/ehrhardt, 789-790). The operation of going public A company cannot just decide to go public and its a done deal. There are steps required in the going public bear on that every company must follow. The first step is to comply an investment banker. Once the company decides to go public, it has to decide on how to sell...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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