General Motors

What is an initial offering An initial earth offering (initial offering) is the ingathering through which a privately held company issues sh bes of stock to the overt for the setoff time. IPOs atomic number 18 almost ceaselessly an opportunity for the existent investors and participating sham capitalist to make big profits, since for the first time their sh atomic number 18s impart be given a food market tax jobing expectations for the companys futurity growth (answers.com). IPO is to a fault known as freeing worldly concern and converts a pocketable business from a privately possess and operated entity into unmatched that is owned by public stockholders. IPOs ar square in the growth of many small businesses, beca drug abuse 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. They are: ? c irculating(prenominal) stockholders drive out 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: ? many reports have to be filed ?operating(a) date must be bring out ?Officers must disclose holdings ? particular(prenominal) deals to insiders will be more difficult 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 of! fspring 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 bidding that every company must follow. The first step is to tackle 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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