Submitted by: Submitted by jschmores1
Views: 10
Words: 780
Pages: 4
Category: Other Topics
Date Submitted: 06/21/2016 05:03 PM
If I were a major shareholder of a Publicly Traded Firm and I preferred that stock options be traded on different stocks, I would need to take a look at what it means the publicly invest. In taking a look at where Public companies stand in the stock exchanges, we would see that Public companies are listed on stock exchanges that sell shares of stock to the public. Essentially, if an investor has enough money to buy a share of stock, they can become a shareholder of the company. There is no restriction on who can purchase stock in the company and who can’t. The U. S. Securities and Exchange Commission (SEC) enforce the rules that Publics firms must adhere to. (Beach, n.d.) Public firms must also file regular earnings reports and other important information with the SEC. Any information that is shared between the Public firms and SEC are available to be viewed by the public and are usually scrutinized relentlessly by investors and media sources. (Beach, n.d.)
If I were a major shareholder of a private firm and I preferred that stock options be traded on that stock only, it would require me to understand the role of investing in Private firms. Private firms are generally owned by a small group of stockholders and this might include the firm’s founder, managers, or even a small board of directors. (Beach, n.d.) Since the private firms choose to have a small group of investors, they do not sell shares of stock on the open market, for example, the stock exchanges. Private firms are not required to file earnings reports and other information with the U. S. Securities and Exchange Commission. Since there information is typically readily available, private firms can sometimes have more flexibility than public firms when it comes to focusing on the long-term investment goals. (Beach, n.d.) Since there is more focus on the long-term goals there is naturally less focus on the short-term profits. Often times when investors misconceive that private firms are small. Typically...