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FINANCE

7.22.99  


Going Public


For many companies, an IPO is a mixed blessing.

Pros:

-- Public equity financing is cheap.

-- Stock can be used to acquire other companies.

-- Stock options can be used for low-cost, high-incentive compensation.

-- Public ownership gives your company and its products increased exposure.


Cons:

-- Shareholders watch your every move and want quarterly earnings increases.

-- Document, auditing, accounting, investor relations, and other costs add up.

-- The law requires disclosure of information that could be personal or competitive.

-- The stock could perform poorly for reasons beyond your control.




This article was originally published in the July 19, 1999 print edition of Business Week's Frontier. To subscribe, please see our subscription policy.


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