SeaWorld Parks and Entertainment, the Orland-based company that owns Busch Gardens and SeaWorld, is rumored to be exploring the possibility of an initial public offering.
We thought the occasion of a homegrown company going public presented a good opportunity to discuss four major pros and cons of a business having its IPO.
- Pro: When a company goes public, that means it sells shares of itself for the first time, and companies can make a lot of money doing that. SeaWorld is looking to raise as much as $600 million, for example.
- Con: Filing for an IPO is not what anyone would call easy. The Securities and Exchange Commission demands lots of detailed information (often generally termed "disclosure") so it can be assured that investors will not be defrauded. That is a noble purpose, of course, but it does mean companies that go public can no longer play their cards close to their vests.
- Pro: Companies that have gone public are often seen as more legitimate and having more potential to grow than are closely held companies. This may mean it is easier to attract investors or secure other financing.
- Con: Once you sell shares of your company, you have stockholders, and stockholders need to be answered to. In other words, going public means forfeiting some control, and that can make some business owners uncomfortable.
Now, we wrote this post in very general, extremely broad terms. Although it does a good job of giving you four big things to think about, every business' situation is different. One really good way to make sure you have an accurate, detailed picture of whether going public is a smart option for you is to discuss that possibility with an experienced business attorney.
Sources:
- The Orlando Sentinel, "SeaWorld Parks & Entertainment preparing to go public," Jason Garcia, Dec. 17, 2012
- Orlando Business Journal, "SeaWorld said to be close to filing for an IPO," Megan Anderson, Dec. 17, 2012
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