Investment & Financial Articles
Title: Why Go Public?
Author: William Cate
Article:
Why Go Public? By William Cate Published September 1999
[http://home.earthlink.net/~beowulfinvestments/] Or, visit the
Global Village Investment Club Website:
[http://home.earthlink.net/~beowulfinvestments/globalvillageinves
tmentclubwelcome/]
It costs money. It takes time. If you try to do an IPO, your
odds of completing it are about even. If you do the average IPO
on the OTCBB, your million dollar costs will exceed the money
you can raise. If you go public you have to battle market
manipulations. You must avoid the Vulture Capitalists that will
destroy you. Public company survival risks can be greater than
for a private company. If your company is a stock scam, you run
the risk of facing criminal charges. The downside to being a
public company appears to argue against taking the public path.
There are three primary reasons that require you to take your
company public: 1. Without liquidity, investors won't risk their
money on your company. If they can't sell stock, they won't
invest in your company. The ONLY way to offer investors the
ability to sell your stock is to take your company public. 2.
Stock is money. You can use your strong share price to acquire
cash-producing assets for your company. This means you can grow
a hundred million dollar company in less than five years rather
than more than twenty years. 3. When you sell, you'll get twenty
times more money for your public company than you would for your
private company. Public companies sell at Market Capitalization.
This is share price times issued shares. Private companies sell
for between 80% and 150% of their pretax profit. Crunch the
numbers and you will ALWAYS get a bigger "Golden Parachute"
owning a public company.
You can solve the serious problems created by taking the public
company path. 1. You can cut your costs of going public by 75%
to 90% by doing a spinoff, rather than an IPO. 2. You can keep
your stock away from the Depository Trust Company. Without
"
Street Stock," it's nearly impossible for anyone to manipulate
your share price against the best interests of your
shareholders. There are a score of tactics that you can use to
stop stock manipulation. 3. You can stop the Vulture Capitalists
by requiring them to pay for the stock they take. You should
ensure that their payment is a multi-dollar share price and
never pennies. You can force them to sell their stock outside
the United States. 4. Your insiders can avoid being caught in a
stock scam by not selling their insider shares. You should Pool
&
Vault all the insider shares until you can sell your company
at Market Capitalization. Your insiders will get the highest
price for their stock. Your Investor Relations costs will be
lower during the public life of your company.
Are you serious about making your company a success? You must
offer a product or service to the World. You must build your
assets over a hundred million dollars. You must go public! You
don't have a choice.
To contact the author: Visit the Beowulf Investments website:
[http://home.earthlink.net/~beowulfinvestments/] Or, visit the
Global Village Investment Club Website:
[http://home.earthlink.net/~beowulfinvestments/globalvillageinves
tmentclubwelcome/]
About the author:
He has been the Managing Director of Beowulf Investments
[http://home.earthlink.net/~beowulfinvestments/] since 1981 and
is the Executive Director of the Global Village Investment Club
[http://home.earthlink.net/~beowulfinvestments/globalvillageinves
tmentclubwelcome/]
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