Why any compony launch ipo?

Question

Why any compony launch ipo?

Answer 1

The main reason for launching an IPO is to raise Capital from the public for pursuing the projected operations of the company.

Answer 2

simple, they need money to run,expand their business.if they borrow from banks or financial institues they have to pay interest. On equity no interest is payable, but the companies do pay dividends when they make profits and no dividend at all if the profits are not there. so, in fact, this is money borrowed from public on which there is no obligation to pay interest and also there is no need to retrun this money.

Answer 3

View It Now: http://www.stockEXE.com

Answer 4

hi,

to rise fund for expansion,

to cash the profit, promoters do it also.

all the best

http://vbulls.com

Answer 5

There might be several reasons why a company might.  1. They are a startup company and they need capital to begin the business.  This is very common during bull markets and during market crazes for particular areas such as for example bio-technology about 20 years ago and solar power technology today.  2. The employees of the company are sitting on a lot of stock that they can not sell because they are not a publicly traded company so by doing an ipo,  there is then a market for the company's stock and the employees can unlock the value of their shares.  3.  The company needs to raise capital to keep from going under and selling more debt is not an option because the company is already leveraged to the hilt so selling more equity is the only option.  That is where the investment banks find themselves today. This is not really classified as an ipo because there is stock already outstanding.