Initial Public Offering (IPO)
An Initial Public Offering is a company’s first sale of stock (shares) to the public typically on a stock exchange, also known as ‘Going Public’.
The shares of the company are listed on a public stock exchange and can be bought and sold on that market.
Benefits of Public Listing
- Access to New finance – new issue of shares raises money for the company and reduces the company’s dependence on debt finance.
- Enhanced Company Image and Publicity.
- Motivating Management and Employees.
- Cashing in – existing shareholders can sell their shares on a public market thus allowing them realise the value of their shares.
Disadvantages of Public Listing
- Costs – direct costs of listing, costs of information disclosure, reduced freedom of action in making business decisions.
- Loss of control – with increased number of shares in issue the original shareholders control is diluted.
- Increased public scrutiny.
Typical Stock Exchanges that Irish Companies have listed on are:
Irish Stock Exchange
London Stock Exchange
- NASDAQ (National Association of Securities Dealer Automated Quotations) system for over-the-counter Stock trading. Founded in 1971, the NASDAQ Exchange is the world’s first electronic stock market.
- How to Become a Member of NASDAQ