IPO Advantages

There are several advantages to going public:

1) Access to capital
One of the most common reasons for going public is to raise primary capital to fund organic growth, repay debt or fund an acquisition. Further direct results include the following:

  • Once the company is public, it has access to an entirely new, incredibly deep and liquid source of capital for any future needs it may have.
  • Adding equity to the company’s capital-raising toolkit helps equip the company with the tools to achieve optimal capital structure.
  • After the company has been public for one year, it will be eligible to access the equity capital markets on demand via a more expeditious process through a shelf registration statement.

2) Increased Liquidity
Listing on the NYSE has numerous benefits, not only for the company, but also for its shareholders. The IPO can be structured such that existing owners of the company can exit their position and receive proceeds for their shares. In addition, once the company is public, the existing owners have a public marketplace through which they can liquidate their holdings in a straightforward and orderly fashion at any time.

3) Branding event
By listing on the NYSE, the company will receive worldwide media coverage through the financial markets, which provide constant live coverage on publicly traded companies. In addition, research analysts at broker-dealers will begin to write reports on the stock and the company, thus raising the profile of the company. Broader coverage across various sources will likely enhance the company’s visibility, market share and competitive position.

4) Public currency for acquisitions
Once the company is public, it can use its common stock to acquire other public or private companies in conjunction with, or instead of, raising additional capital.

5) Enhanced benefits for current employees
Stock-based compensation incentives align employees’ interests with those of the company. By allowing employees to benefit alongside the company’s financial success, these programs increase productivity and loyalty to the company and serve as a key selling mechanism when attracting top talent. Furthermore, issuing equity-based compensation will allow the company to attract top talent without incurring additional cash expenses.

IPO Guide

Learn about potential issues that may arise when launching an IPO, going public without an offering, and foreign private issuers.

Take the Plunge

Once you decide to take your company public, NYSE Euronext will support you through the listing process—and beyond.