How does a private company go public? What is the process and requirements? Is there a set amount of profit that a company has to make before going public?
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A public company is a company which is traded on a public open stock exchange. The stock exchanges do have a lot of requirements for companies traded on them. Due to the high frequency of trades it is hard for the traders to do the regular due diligence process that is required before buying a company or even on the sellers to see if there is a special reason they are selling. So in order to go public a company needs a lot of routines in place to make sure financial information is kept secret, that those people who know is listed publicly and monitored for suspicious trading and that the financial information is released on the right platforms and at the same time. So there is no possibility of any of the traders on the public market getting scammed by someone following the CEOs twitter feed for early hints.
All of these routines needs to be documented and implemented and reviews of this will be required. Then all the relevant financial information to any stock trader needs to be published to allow analytics to go through them for their initial assessment of the company. And finally the CEO and board member can launch the initial public offering by ringing the stock exchange bell that signals the start of the trading day.
All of this is a lot of work for the company and involves a lot of fees along the way. So it does not make sense for a small company to go through all of this. It is much easier for them to go through a due diligence process by any potential investor so they can walk through all of their financial and operational details with each investor individually. But there are also larger companies where the owners do not want them to go public because of all the work involved and all the financial information which becomes public. But it tends to be that larger corporations go public in order to make it easier for new investors to buy the stock while smaller companies can do without.
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