THE DECISION OF GOING PUBLIC – WHEN, WHERE AND WHY?

Abstract

The decisions of the company, in what it concerns financial resources, play a key role in its existence and evolution. Funding through the stock exchange, due to its implications, is especially challenging in the current economic and financial enviroment. By bringing into question the results of relevant studies, we aimed to answer three key questions about the decision of firms to become public: when is the appropriate time, on what market to start selling primary shares and wich are the main implications of this decision? Although a theoretical work, we consider the paper to be of interest due to the whay results of specialized studies were systematized. The overall conclusion is that there are no firm or unanimous answers. Most opinions converge to the idea that the perfect time for a company to become public is when the stock market is growing or marked by optimism. Regarding the question on what market to open to the public investors, most studies recommend international markets due to their size and higher chances of success. However, as any financial decision, the decision to become public involves positive and negative effects. Arguments in favor of the initiative to become public and cons of such an approach are addressed in the same manner, by reference to relevant studies undertaken in the field.

Keywords

• initial public offer
• public company
• stock exchange