[Help Needed] Public vs Private
Got stumped by this question in an interview and could use some help - why would an asset go public vs stay private. Alternatively, why would an asset stay private vs go public?
Got stumped by this question in an interview and could use some help - why would an asset go public vs stay private. Alternatively, why would an asset stay private vs go public?
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Generic and non exhaustive. Market, sector and asset specific factors obviously come into play.
Go Public
- Pros: Liquidity, ability to tap new pools of capital, use paper for acquisitions, founders can monetize some sweat equity/shareholders can take money off the table, price discovery
- Cons: Cost of going public/ongoing reporting and compliance, living quarter to quarter, management time/resources dedicated to IR and pubco commitments
Stay Private
- Pros: Greater control of the business, flexibility that comes from not living quarter to quarter, less time and resources dedicated to IR
- Cons: No access to public pools of capital, no price discovery, no liquidity
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