Is it a good thing or a bad thing to be a publicly held company? Back in the heyday of the late 1990s, an initial public offering (IPO) was "the" thing to do. An IPO raised sometimes enormous amounts of capital and established companies with the potential for what was thought to be tremendous success on Wall Street. In 1999, a total of 541 companies went public. However, the bursting of the tech bubble in March 2000 changed all that. Companies once thought to be the darlings of Wall Street failed, and entrepreneurs became gun-shy at the prospect of going public. Now the economic slowdown has reduced the number of IPOs to what they were in the 1970s. Want to take a guess at how many companies went public in the first quarter of 2003? Five. Yes, that's right, five. In the same quarter, 17 companies withdrew their plans to go public in 2003. That doesn't say a lot for the "lure" of having your stock traded on a major exchange, does it?

However, there are still valid reasons to become a publicly held company. Having your stock traded on a public exchange can provide a return for investors and an incentive for employees because stock in the company becomes a freely tradable security. Being a public company also provides a certain amount of advertising in terms of public visibility, which is generally not afforded private companies.

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