Friday 1 January 2016

Public or private? The number depends on the market performance

Tech companies raised less than 10 billion dollars in the US in 2015. The figure was lower than the previous years. It could be caused by two facts. Firstly, if the investors are not as interested as previous in investing in high tech, the funds raised could be lower than the previous levels. Secondly, if more tech companies feel staying private is important, fewer companies will choose to issue IPOs. However, the advantages and disadvantages of going public and staying private are generally the same. The one that changes often is the size of funds that could be raised from the financial market. When the stock markets do not perform well, the benefit of going public will be weakened. Therefore, more companies will choose to go public if the stock market is performing well. The decision largely depends on the market performance.

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