This financial management company, which this man created, is obviously in the ideal position for growth. The question is which medium he will use to fund this growth. Either he can go public and sell shares of stock or sell the company privately. There will be advantages and disadvantages for each path.
Going public allows the owner to diversify his financial holdings, increase liquidity, facilitate raising new corporate cash, establish value for the firm, can set up merger negotiations, increase potential markets. Issuing stock to the public allows the owner to reduce risk privately; he can sell stock to diversify his holdings in his private portfolio. The market also allows the company to become very liquid by giving the owner the ability to sell existing shares for cash. It also provides an avenue to raise cash quickly by issuing new shares of stock for the market to consume. By going public will also provide an exact value of what the company is worth. This information will help in a number of different ways, such as providing stock options for employees. This value also opens the company to mergers and acquisitions. Stock can provide a medium of payment when the company is
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