IPO
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Assume your organization is privately held, wants to expand operations, and is faced with three options for expansion:
o Going public through an IPO
o Acquiring another organization in the same industry
o Merging with another organization
? Prepare a paper in which you compare and contrast options and make a recommendation about which strategy the organization must choose. Address the following in your paper:
o Strengths of each approach
o Threats of each approach
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Strengths of each approach:
IPO: The strength of an IPO is that the founders of the company feel that they have more wealth when they use an IPO. The reason is that they can sell their own shares and liquidate their holdings. Strength of IPO is greater prestige and esteem for companies that go public. An important strength is that the an IPO provides greater liquidity to the shareholders. Once shares start trading on the stock exchange they have a market value and can be sold and resold. An IPO simply means that there is greater capital for the company.
Acquiring another organization in the same industry: The strengths are that the company gets greater power in the market; Further, the company is able to expand its sales in the market because of combination of distribution channels; In addition, the organization is able to improve its bargaining power with suppliers; The organization is able to enjoy economies of scale and has the ability to keep out new ...
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