FINANCE
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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.
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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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