The Pros and Cons of Being a Public Company Essay

The Pros and Cons of Being a Public Company Essay

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Over the number of years, many private companies go public and it is becoming the trend. More and more companies are being listed in the stock markets. Every year, the new initial public offerings (IPOs) can be found in Bursa Malaysia and in the other countries’ markets around the world, such as NYSE. Recently, OldTown Berhad became a public listed company and trades its shares on the main board of Bursa Malaysia in 13 July 2011(Bursa Malaysia, 2011). It was founded in year 1999 as a private limited company and is the operator of “OLDTOWN WHITE COFFEE” chain outlets. The conversion of OldTown Berhad becomes a public listed company because they want to raise fund from the public to expand the business. Same thing happened to the other companies like Gas Malaysia and Peterlabs Holdings Berhad (Bursa Malaysia, 2011). Other than going public, there are several types of method to get the fund such as loan from banks, issue bonds and debentures. Therefore, there are reasons for the companies to go public. There is a say, “no pain, no gain”, is suitable to describe the companies in evaluating the advantages and disadvantages of going public with the other methods because they are indispensible.
The advantages of listing as public company has numerous benefits, the most significant one is opening wider and more comprehensive channel to raise fund. The fund could be raised by investing activities by individual stockholder or institutional investors. (New Straits Times, Business Times, 2010). The OldTown Berhad IPO was total RM79.2 million for the Group, RM38.1 million of it would be allocated for capital expenditure, that incorporated new factory building, machinery, facilities and capital for opening new café outlets, while RM19.7 mil...


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...lic and private firms. Retrieved at 11 October 2011 from http://www.edegan.com/pdfs/Mortal%20Reisel%20(2009)%20-%20The%20Real%20Benefits%20Of%20Being%20Public%20Evidence%20From%20Public%20And%20Private%20Firms.pdf
Ramirez, S. (n.d.). Major Acts of Congress. Retrieved October 7, 2011, from eNotes: http://www.enotes.com
The New Straits Times Press (Malaysia), (2010) Benefits and risks of going public, Business Times, Retrieved at 11 October 2011 from http://www.btimes.com.my/Current_News/BTIMES/articles/wkn05/wkn05.pdf
U.S. Securities and Exchange Commission(SEC), S. a. (2010, January 29). The Laws That Govern the Securities Industry. Retrieved October 7, 2011, from U.S. Securities and Exchange Commission: http://www.sec.gov
Wreford, T. (n.d.). Stock Trading- Advantages and Disadvantages. Retrieved October 7, 2011, from Zeromillion.com: http://www.zeromillion.com

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