Going public
Summary
Opening up company ownership to anyone who has the money and a desire to buy shares.Key Concepts
- Public companies can sell their shares openly to anyone.
- Going public opens up a potentially vast source of investment for growth.
- In return for the privilege of selling shares openly, public companies are subject to onerous regulation.
- A public company's share price is subject to swings in public opinion and its directors' professional reputations are under continuous and merciless scrutiny.
- In practice, most private individual investors engage very little with the businesses in which they have invested.
- Private equity and institutional investors are examples of commercial investors that apply to very large ideas businesses.
- Managing investor expectations is a critical function for any public company. The challenge is to sustain belief in growth without resorting to stunts that create short-term good news but have adverse or neutral long-term effects.
