Generally, the largest companies in the world are identified with listed companies. But, Why do companies need to get listed in the stock market? What are the advantages of being listed?
 |
| Stock Exchange |
What are the Advantages of Listing a Company on the Stock Exchange?
There are many advantages to going public with an IPO (initial public offering). The primary advantage a business makes an initial public offering (IPO) and goes public is access to capital.
Every day, several new companies go public on the stock exchange and make an initial public offering (IPO) to buy the company's stock. Because every business needs financing. And the Stock Market is the greatest meeting point between companies and investors and, therefore, to be able to get it. That is why the main reason to go to the stock market is to obtain equity financing.
One of the most obvious reasons many companies choose to list on a stock exchange is the increased availability of immediate capital. A publicly listed company can acquire resources for strategic purposes without the need for the original shareholders to use their own resources to inject capital into the company.
Listing a company on a stock exchange stimulates liquidity and provides shareholders with the opportunity to realize the value of their investments.
As a shareholder, knowing the price of what one owns, knowing that at any time there will be buyers who will provide liquidity, or sellers who will allow greater equity participation, this is key and from that knowledge of the reality in the market, it is possible to begin long-term strategic planning.
The original shareholders of the company can diversify their investment, increase their liquidity and obtain the flexibility to make decisions about their assets.
Listing a company on a stock exchange is recognized in the market as a guarantee of solvency, transparency, and prestige.
Entry into the stock market is in itself a recognition of the company's solvency, as it must demonstrate its ability to make profits. Investors willing to contribute funds will value every effort made to streamline and professionalize the management of the company. In this way, a constant incentive is generated to increase the competitiveness of the company.
This prestige is recognized not only by investors but also by clients, suppliers or financial partners of the company. The results are, therefore, interesting: strengthening of the commercial position, improving relations with suppliers, customers, banks, etc.
The open market provides advertising that enhances the prestige and brand image of the company. The interest of professional analysts and investors in information on listed companies leads to a presence in the media that is higher than that of other companies, especially in the financial press, both nationally and internationally.
This presence in the media, which is part of the company's external relations, complements conventional marketing and advertising efforts with great efficiency.
Especially in the case of companies that produce goods or services for general use, the Stock Exchange contributes to increasing the degree of diffusion of the brand. The advertising, contracted or spontaneous, that accompanies its IPO (Initial public offering) has a direct effect on its brand recognition.
The image of the company improves due to the continuous publicity that the market provides and that is echoed in the media.
A company that is ready to go public has the ability to achieve a high level of organization and control. Listing a company on a stock exchange helps promote increased accountability and transparency for the actions of all company workers as listed companies are required to follow stock exchange rules.
A company that chooses to list on a stock exchange often gets increased company exposure as a result.
Listed companies have a prestige and brand image that is indirectly granted by the Stock Market. They become more attractive both nationally and internationally since their management is institutional and they provide information to the public, which generates credibility and value with foreign investors.