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:
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.
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.
Exit strategy for founders. Going public provides an exit strategy for early investors and founders, allowing them to sell their shares for a profit.
Liquidity for investors. The shares of a public company are easily bought and sold on stock exchanges, which provides liquidity to investors.
Easier acquisitions. Public companies can use their stock as currency for acquiring other businesses.
Brand recognition. Publicly traded companies gain higher visibility and trust from customers, suppliers, and business partners.
Attracts top talent. Public companies can offer stock options and equity-based compensation to attract and retain top talent.
Potentially higher valuation. Public companies often enjoy higher valuations due to investor demand and market confidence.