Why listing

Listing stimulates liquidity, giving shareholders the opportunity to realize the value of their investments.

It allows shareholders to transact in the shares of the company, sharing risks as well as benefitting from any increase in the organizational value. Going public increases visibility and improves public perception of the organization, thereby increasing employee value and morale. It may also lead to hiring of new staff and may facilitate stock-based payments such as ESOPs etc.

Listing brings transparency and efficiency in the overall operations of the company. The board and management team of a listed company has accountability towards it shareholders.

ALL Menu. Trending How a quality audit enhances trust 10 Oct Assurance. Why the potential end of cash is about more than money 7 Jan Banking and capital markets. Select your location Change. Local sites. Connect with us. My EY log in. Link copied. How to decide whether to list in your home market or overseas. Martin Steinbach. Related topics IPO Innovation. Download 7 MB. Capital market, stock exchange and listing segment — what's the right option when taking your business public?

Home or away? Understanding your options — and their implications Selecting the right capital market, stock exchange and listing segment enables you to determine the regulatory requirements that your company will have to meet as a public entity. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products.

List of Partners vendors. The primary advantages for a company listing on the Nasdaq exchange are lower listing fees and lower minimum requirements to qualify for a listing. The fact that Nasdaq features all-electronic trading is considered an advantage by many traders as well. The main disadvantage of a Nasdaq listing as compared to a listing on the New York Stock Exchange NYSE or the London Stock Exchange LSE is a perception of less prestige, less of a blue-chip status for a company, although this perception has faded considerably as major firms such as Apple, Google and Microsoft have become notable Nasdaq exchange-traded successes.

The Nasdaq's lower minimum requirements to be listed offer easier entry for new, smaller companies to be listed on a major exchange. The Nasdaq was the first all-electronic trading exchange. This would appear to be an advantage as electronic trading increasingly becomes the norm worldwide on trading exchanges. The NYSE still uses specialists, actual people working on the floor of the exchange that buy and sell large blocks of stock. While the NYSE would likely argue that its use of specialists guiding trades is superior, the faster execution available through straight electronic trading appears to be the deciding factor for investors.

If the objective of a listing is to allow the owners to cash in on their investment, a trade sale, where the business is sold to another outside party, might be a viable solution. Stock market listing. Costs The flotation process has demanding legal, regulatory, financial and marketing aspects. These include the following: corporate adviser stockbroker corporate lawyer accountant public relations firm for large listings.

Timeframe A stock market listing is a complex process, which sometimes needs to be preceded by a pre-float preparation. Advantages access to additional equity capital to consolidate or develop business facilitating owner managers and other investors in the realisation of their investment by access to trading in a liquid market higher public profile for the company providing incentives to employees by granting share options providing added reassurance to customers and suppliers improving the ability to acquire other businesses by issuing shares as well as cash.

Disadvantages high cost of listing and subsequent higher costs of compliance with specific regulation uncertain timing of listing burden of additional regulatory requirements and compliance with strict standards of corporate governance loss of control over the company, which may eventually be taken over possible loss of management focus following listing, due to dealing with investors shift of focus from owner-manager objectives to interests of other shareholders possible demotivation of employees who are not offered shares.

Other options The right finance for your business section gives examples of financial structures that are suitable for different trading types and sizes of businesses. Contact us Send us a message. Planned system updates View our maintenance windows.