Factors for Going Public Through an Ipo Essay

When an composition is private they do decisions to make. Going general done an initial macrocosm offering, or IPO is one decision they flush toilet lead. When going through an IPO there is going to be add-ond expectant. A humanity offering allow allow a community to raise capital to use for various corporate purposes such as working capital, acquisitions, search and development, marketing, and expanding plant and equipment (FindLaw, 2013). Other advantages of choosing an IPO would be liquidity, increased prestige, valuation, and increased wealth. Weaknesses til now though going everyday has some advantages, it stick out also incur some disadvantages too. The time and expense is probably one of the biggest disadvantages with this choice. It can bow out over a year and much money for fees to stock-still fasten on the process of an IPO. Other disadvantages to going public through an IPO would be disclosure, decisions based on stock price, regulatory review, falling st ock price, and vulnerability. revelation is another part that can be costly when starting an IPO. That pith that the presidential term has to make all financial records available to the public. OpportunitiesGoing public is a way to increase public awargonness of the ships go with. The company go forth boast more exposure of its product line. This awareness depart increase sales because the product provide be introduced to a new conclave of potential clients. An opportunity to increase clients will have an increase in market share. Investors will have a positive reaction to the company as it increases its market share. ThreatsAs a public company, there will be be practices that will need to be met. The SEC requires public companies to comply with the regulations. The cost to comply with SEC regulations can be overpriced in addition to the regulations the SOX Act will require an external accounting firm to audit the company adding additional cost. Since Lafleur will now be operating as a public company, they will have the pressing to perform for the market. The actions of the companys focal point also become increasinglyscrutinized as investors constantly look for rising profits. This may lead management to perform somewhat questionable practices in order to boost net profit (K. Balasubramaniam, 2009).Factors for acquiring another government in the akin diligence StrengthsAn organization can also acquire another organization in the same(p) industry. A major position with acquiring another organization is that Lafleur trade beau monde would be the owner of two organizations and would hold the power of both at the same time. The new organization loses its power and sometimes even loses the name. Acquiring another organization might be done to fulfill the original smaller company while boosting sales for the larger company. If Lafleur would choose to keep the client list of the new organization it would be strength for them and those clients . The clients would still be able to receive the same products, but beneath new owners. With the new organization being in the same industry Lafleur would not have to buy any additional equipment for the new product. They could only bring the product over to their buildings. WeaknessesAcquiring another organization has its weaknesses too. Customers can become upset over this because they want to be loyal to the forward owners over the newer ones. Lafleur would have to pay a premium to the affiliate of the organization to keep the customers happy (if they can) and without upsetting cash flow. OpportunitiesThere is opportunity in a companys strengths. Lafleur can take advantage of the successes the acquired company has accomplished in the areas of product, marketing, research and development, and staffing. They can also avoid mistakes that have been made in the past. Using a synergy strategy in this process of acquisition will require Lafleur to be knowledgeable in the operations o f the new company. ThreatsThe threat of acquiring another company in the same industry is in its customer base and product line. Lafleur may not be gaining new clients or offering new or improved products. The sales team may be making the same sales calls to the same customers the other company. In this scenario,Lafleur will be gaining the companys debt without the benefit of expanding resources for future growing. Merging with another organizationStrengthsMergers are different than acquiring a new organization because when two companies connect they work together instead of taking full control of the weaker company. Mergers can booster both organizations while also benefiting the public. The new firm will have increased market share, which reduces competition (Economics Help, n.d.). The conjugation will help financially because the company will get a go against enkindle rate for the size. Efficiency is strength for unitings because the companies can bring the more pay backd employees from both organizations together. An important strength of a merger is having diversity betwixt the two original organizations. Other strengths would be research and development, avoiding duplication, and regulation of monopoly. WeaknessesMergers have weaknesses just like any other choice to expand the organization. Mergers represent higher prices for products because competition is cut when two organizations become one. A merger also means fewer choices of products for customers. One of the biggest weaknesses for a merger would be fewer jobs in each organization. This means that Lafleur would have to let go of some of their employees while the organization it mergers with would have to also let go of some. The employees that are left might knowledge diseconomies of scale. This means that the employees will aspect like they are part of a big corporation and their motivating will start to go away. OpportunitiesOpportunity lies in a merger with a larger well known com pany. Lafleur will gain the experience of growth from a larger company. There is also the opportunity of better benefits, salaries, increased revenue, and the expansion of offices in other markets. There must be research to be done to choose a company that will aid in future growth. This company will need to be a worthy partner and not a company that necessarily a lifeline to survive. ThreatsIf a company does not have a growth opportunity on its own, it will not have growth opportunity when it merges with another company. The threat of Lafleur not benefitting from shared resources can settlement in failure for both companies. Another threat to a merger is mis-management. If the other company is poorly managed, Lafleur will suffer with unrealistic strategic goals, poor communication, and uncertain future success. It is because of these reasons that most companies do not experience more than one merger in their lifetime, they usually fail.Balasubramaniam, K. (2009). Advantages and D isadvantages for a Company Going Public. Retrieved from http//www.investopedia.com/ask/answers/06/ipoadvantagedisadvantage.asp