Whether or not to go public is a hard decision in the life cycle of a company. Going public involves having the shares in a company quoted on a stock exchange, and companies usually go public via an initial public offering (IPO) of their shares to investors. The shares sold at IPO can be either newly created or existing shares. In the case of new shares, the proceeds from selling these to investors accrue to the company. When existing shares are sold, the proceeds obviously accrue to the company.
In many countries the majority of companies raise external equity finance once - at the time of the IPO. Thereafter they tend to rely upon retained earnings and debt (from banks or through issuing bonds) to finance their operations, and the importance of the stock exchange as a source of additional finance becomes less important. As a result, the efficiency of the IPO process, and the performance of companies that have gone public has been the subject of considerable academic research.
Going Public focuses on the efficiency of the IPO process, but does not completely exclude subsequent equity issues. It is the first book to investigate the issues in a non-technical manner, drawing upon international evidence from private-sector companies and privatisations. Building on the success of the first edition, this second edition of Going Public has been comprehensively revised and updated. |