People overestimate the fiduciary responsibility of public companies. It’s true they will often pursue aggressive short term gains to attract more investment in several forms, including higher stock prices. But as long as they are arguably trying to help the company they are considered to have fulfilled their obligation. You have to be able to prove in court they are trying to harm the shareholders to run afoul of that responsibility, which is a fair hurdle. And it isn’t really that difficult to avoid a forced IPO by keeping under the 500 shareholder threshold if one really wants to avoid it.
Comment on Gaming chat platform Discord in early talks with banks about public listing
sibachian@lemmy.ml 3 days agoat a certain size companies are required to go public. and indeed, as a public company your first and only responsibility is ensuring shareholders can grow capital based on nonsense quarterly projections.
AEsheron@lemmy.world 3 days ago
ShadowWalker@lemmy.world 3 days ago
A forced ipo happens if they have over 500 share holders and $10 million in assets. It is easiest to avoid the shareholder amount.
AstridWipenaugh@lemmy.world 3 days ago
There is no requirement to ever go public, in the US anyway. I work for a multi-billion dollar company that’s entirely privately held. It just tends to happen because it’s the best way for the equity holders to convert their ownership into cash. It can be hard to sell a whole company because that requires someone to go all in to buy it and they must accept all the risk of maintaining its value. But you can go public and get tons of investment money without having to sell.
sibachian@lemmy.ml 3 days ago
it’s called a forced ipo and if’s a thing in the US specifically.
AstridWipenaugh@lemmy.world 3 days ago
The company must have more than 500 equity holders and have more than $10 million in assets. If the company maintains a limited number of owners, they will never be required to go public regardless of their valuation.
investopedia.com/…/forced-initial-public-offering…