The companies’ efforts to list themselves in the market and offer their shares for public subscription are behind many reasons, perhaps the most prominent of which is the company’s desire to increase its capital. The private company mainly depends for its funding sources on the money of its owners and founders, usually their number is limited and they may face insufficient capital to meet the company’s financing needs as well. Many private companies do not want to borrow because of the attendant risks and high interest costs, and sometimes the company may want to expand, but it needs huge capital, which is provided by listing in the stock market, as listing companies in the financial market simplifies and facilitates access to individual investors and companies and enables them to Obtaining from them capital in exchange for their shares in the company.
Companies may use the capital they obtain to finance their projects, increase the growth of their operations and pay off debts, or use their shares as currency in acquisitions by offering the listed company new shares to the company to be acquired instead of cash or borrowing.
Also, listing the company in the financial market helps the company’s founders to convert part or all of their property into cash. It is true that the listed companies are obligated to disclose their financial statements, but this matter has a positive aspect for the company, which is to improve its reputation in the market as a company that enjoys a reasonable amount of money. Integrity and transparency, which will reflect positively on the consumer's view of the services or products that it sells.
The investor on the other side also benefits from the company’s decision to list itself. If there is a private company and he believes that it has a promising future and wants to invest in it, he may not be able to own part of this company because he needs large sums, and the investor can diversify his investment portfolio to include listed companies It works in different sectors regardless of the size of its capital. Also, if the investor wants to exit, in the case of private companies, it is not as easy as it is in the case of public joint stock companies in which you own shares that you can sell in an instant through your mobile account.
Finally, I hope you will benefit from this article
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