Publicly held definition
/What is Publicly Held?
A business is publicly held when its shares have been sold to the public through an initial public offering , and it subsequently makes required periodic reports to the Securities and Exchange Commission . Investors can then buy and sell their shares on a secondary market. A business that is publicly held is nearly always structured as a corporation .
Terms Similar to Publicly Held
A publicly held company is also known as a publicly traded company.
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Advantages of a Publicly Held Company
There are several advantages associated with a publicly held company, which include the following:
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Access to capital . Public companies can raise large amounts of capital by issuing shares on the stock market, allowing them to expand faster than private companies with less access to capital.
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Easier debt financing . Public companies often get better loan terms and lower interest rates since they have greater financial transparency and access to capital markets.
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Exit strategy for founders . Going public provides an exit strategy for early investors and founders, allowing them to sell their shares for a profit.
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Liquidity for investors . The shares of a public company are easily bought and sold on stock exchanges, which provides liquidity to investors.
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Easier acquisitions . Public companies can use their stock as currency for acquiring other businesses.
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Brand recognition . Publicly traded companies gain higher visibility and trust from customers, suppliers, and business partners.
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Attracts top talent . Public companies can offer stock options and equity-based compensation to attract and retain top talent.
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Potentially higher valuation . Public companies often enjoy higher valuations due to investor demand and market confidence.
