Baderman Island Resort

Baderman Island Resort's desire to expand the business can be fulfilled by going public through an initial public offering (IPO). An IPO occurs when a privately held company issues shares of stock to the public for the first time. The option of an IPO provides many advantages, disadvantages, opportunities, and threats for Baderman Island Resort. The most important advantage is the immediate gain and use of capital for the business. The public offering also increases awareness and publicity for Baderman's. The resort will face time and money challenges with an IPO. The process of going public is time consuming and expensive because of the costs associated with complying with the rules and regulations. The market pressure of going public puts the focus on short-term goals and gains, which can take away from the real focus of the resort. IPO’s provide companies with business opportunities as a whole and also for management and employees. Baderman Island Resort’s stock options create incentives for its current management and employees and the stock options can attract better management talent. The increased level of motivation and performance is highly beneficial for a business. The stock offered by Baderman’s provides more business opportunities because of the value the stock adds to the business. Many threats exist when a company decides to go public. If Baderman Island Resort chooses to go public, it will face challenges of less flexibility, loss of control over the business, and a lack of confidentiality because of the requirement of disclosing information to the public (Reference for Business, 2014).

References

Reference for Business. (2014). Going Public. Retrieved from http://www.referenceforbusiness.com/encyclopedia/For-Gol/Going-Public.html