Going private

Going private is the process of acquiring most of the outstanding shares of a public company, so that ownership is concentrated with a small number of investors. By doing so, a business no longer has to make periodic reports to the Securities and Exchange Commission, so its financial statements are no longer available to the general public. However, doing so also means that shareholders will no longer be able to trade their shares on the open market. Going private is a good option when the market price of outstanding shares is low, making it cheaper to buy them. A business is more likely to entertain this option when it is having difficulty raising funds by selling shares or bonds, which is a common problem for firms that have a thin market for their securities.

Related Courses

Public Company Accounting and Finance