Listing on The Stock Exchange

The stock market/exchange around the world has been hit badly during the current global economic crisis.  From US to Europe to Asia, the listed stocks/shares have been devalued greatly.  Some reports quoted losses of up to 80% in value.

During the course of my work, I have met with numerous companies that wanted to be listed.  Most of the time, I have been very candid with my opinion on listing on a stock exchange.

In reality, there are only two valid reasons for wanting to go listing.

(1) The company needs additional capital to expand its business; and/or

(2) The initial shareholders want to cash out!

The other reasons normally quoted actually means little.  There are actually no real advantage to be quoted on a stock exchange.  In fact, if we were to be really candid and honest with ourselves, there could be more disadvantages to be listed.

I have had meetings shareholders who are adamant not to go listing.  One of the most often quoted question that I would get is "why should I share the company's profits with someone else?".

There are quite a number of private companies that have remained so even though their revenue and profits are huge.  Huge in comparison to some of the BIG CORPORATIONs listed on the stock exchange.

So really there are not many reasons (other than the ones I mentioned above) why companies should go for listing.