When a company is ready to sell shares of its stock to the public, thereby turning its ownership over to public investors, it must undergo the process of an IPO. This process carries a number of advantages and disadvantages, as well as significant costs to the formerly private company. I created this infographic to take you through the process and help you understand why IPOs create major waves in the investment world.
![What is an Initial Public Offering (IPO) [infographic]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_uFJuBjVQZuVj0tHziDeiZb3QHQS0UCt8_sSdCV_eFe8_x9DigLoGtpSfeS6_FxQi84ET7sDXVXfX5vt0ivlDy_ZW7y7AHj0AMm7yDLwDksRrXiT7F9Q52PkO0dJefQpl5TivIRQg=s0-d)
Conclusion:
Despite the significant costs of issuing an initial public offering, taking a company public holds many advantages. These range from diversifying the equity base of the company, to holding greater prestige in the public eye and thereby attracting new investors and better employees. Other risks like being forced to divulge profitable trade secrets may hold a private company back from wanting to go this route, but for early investors in a successful enterprise, the IPO usually means a big payday.
Conclusion:
Despite the significant costs of issuing an initial public offering, taking a company public holds many advantages. These range from diversifying the equity base of the company, to holding greater prestige in the public eye and thereby attracting new investors and better employees. Other risks like being forced to divulge profitable trade secrets may hold a private company back from wanting to go this route, but for early investors in a successful enterprise, the IPO usually means a big payday.
Source: http://www.timothysykes.com/
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