Listing is a term in the securities market, that is, initial public offering (IPO), which refers to the process of an enterprise listing and trading in the open market for the first time in order to raise funds for enterprise development. In Chinese mainland, the company's shares are traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange through application.
Compared with ordinary companies, the biggest feature of listed companies is that they can use the securities market to raise funds and widely absorb social idle funds, thus rapidly expanding the scale of enterprises and enhancing the competitiveness and market share of products.
Second, the advantages of listed companies
1, improve the financial situation
The capital obtained through the company's listing can immediately improve the company's capital structure and ease the financial pressure. In addition, if the IPO is very successful and the market trend is good, then the company may issue more shares at a better price.
2. Use stocks to motivate employees.
Companies often gather high-quality employees through employee incentive plans such as stock options. This kind of incentive often makes employees feel a sense of responsibility as business owners and makes them closer to the company. The stocks of listed companies are more attractive to employees, because the stock market can decide the stock price independently, thus ensuring the realization of employees' interests.
3. Improve the company's reputation
Public listing can help companies improve their visibility in society. Through public channels such as press conferences and the daily performance of the company's shares in the stock market, all sectors of society will pay attention to the company. If the company's performance is good, it will enhance its reputation.
Third, the disadvantages of the company's listing
1, loss of privacy
After the company goes public, it is necessary to disclose all accounts, the company's business plan and strategy, and afterwards, but all information that may affect investors' decision-making must be made public. The public disclosure of the company's information deprived the company of its original privacy.
2. Management personnel are restricted.
Once the company goes public, every step and plan of managers must be approved by the board of directors. The shareholders' meeting will measure the performance of managers through company benefits and stock prices. This kind of pressure will force managers to pay too much attention to short-term interests rather than long-term interests to some extent.
3. Listing has certain risks.
The profits of many publicly listed stocks are not as high as expected, and some even plummet for various reasons. The reason for these disappointments is probably that the stock market is generally depressed, or the company's profit is not as good as expected. The setback of stock listing and after listing will seriously affect the recovery profit of venture capital, and even make venture capital fall short.