Why Go Public?

Most clients tend to wonder if their interests are best served by going public; and in fact a Public Offering is a decision that private companies should analyze very carefully. While Public Offerings can be extremely useful for private businesses seeking to grow quickly, the also come equipped with issues such as Public Disclosure, higher fees, limited shareholder control, and stringent reporting requirements. Companies that are interested in undergoing a public offering should seek out the proper advice to determine if they are a viable candidate for a Public Offering and how it would effect the future direction of that particular company. Clients of Princeton Corporate Solutions will receive this direction and will then be able to make an informed decision.

Companies are initially interested in undergoing a public offering for many reasons which include:

1. Access to Capital
   The primary reason that companies seek to go public is to ease the fundraising process. The fact is that public companies are provided instant credibility within investment markets and are more attractive investments for many private and institutional investors.
2. Mergers and Acquisitions
   Because the value of public stock is seen as a more risk adverse transactions, public companies generally are able to ease the M&A process due to their ability to liquidate public shares.
3. Higher Valuations
   Simply stated; Due to their perceived credibility, Public Companies are valued higher than private ones.
4. Less Dilution
   Due to a stronger and more diverse market for shares there is a lower risk of dilution once the Initial Public Offering (IPO) occurs.
5. Liquidity
   By going public a company can immediately liquidate a portion of privately-owned shares at a premium price point, which can immediately create and sustain wealth for employees, managers, and owners.
6. Prestige
   Public companies, and the instant credibility that comes from being public companies, are generally more prestigious and have a public relations advantage when compared to their private contemporaries.

While there are numerous benefits to being a publicly traded company there are also some disadvantages such as:

1. Public Reporting
   Being public requires certain reporting to the government and to shareholders. This requires time and expense, for example, audited financial statements.
2. Confidentiality
   Being a public company requires full disclosure; management can no longer keep the actions and progress of the company confidential.
3. Liability
   Management has certain additional liability required by law to the shareholders and to the public. Being public allows additional visibility, which automatically increases the level of liability.
4. Maintaining stock value
   Being a public company requires a certain amount of public relations, both to the public and to the financial community, to keep the stock trading at a level, which reflects the value of the company. This requires both time and money.

There are several different options available to companies desiring to go public. Each has its own advantages, disadvantages, state and federal requirements, time constraints, and costs. Careful consideration should be given as to the method used to achieve a public company, and the advice of professionals should be sought. As a high-end service provider Princeton Corporate Solutions seeks to provide you all of the information that it can to insure that our clients make informed decisions and, if they do decide to pursue a public offering, that they do so in a manner that is best for the company now and into the future.

Advantages Of Using Princeton Corporate Solutions

Princeton Corporate Solutions executes value added services that provides short term and sustainable long term benefits for its clients.