{"id":30442,"date":"2024-10-24T23:56:00","date_gmt":"2024-10-24T15:56:00","guid":{"rendered":"https:\/\/www.granitefirm.com\/blog\/us\/?p=30442"},"modified":"2024-10-25T07:28:43","modified_gmt":"2024-10-24T23:28:43","slug":"dont-want-to-go-public","status":"publish","type":"post","link":"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/","title":{"rendered":"Why companies don&#8217;t want to go public? prefer to staying private"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#A_good_question\" >A good question<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#Not_cost-effective_to_invest_resources\" >Not cost-effective to invest resources<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#Going_public_costs_a_lot_of_money\" >Going public costs a lot of money<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#Financial_reports_wastes_resources\" >Financial reports wastes resources<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#Cumbersome_regulations\" >Cumbersome regulations<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#The_rich_prefer_privatization\" >The rich prefer privatization<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#Keep_low_profile\" >Keep low profile<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#Dont_want_to_share_profits_with_others\" >Don\u2019t want to share profits with others<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#Financial_aspects\" >Financial aspects<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#No_pressure_to_raise_funds\" >No pressure to raise funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#Going_public_is_no_longer_the_only_way_to_raise_funds\" >Going public is no longer the only way to raise funds<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#Special_considerations\" >Special considerations<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#Keep_it_mysterious\" >Keep it mysterious<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#State-owned_enterprises\" >State-owned enterprises<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#The_founders_persistence\" >The founder\u2019s persistence<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#Capital_market_pressures\" >Capital market pressures<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#Dont_want_to_deal_with_investors\" >Don\u2019t want to deal with investors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#Market_favors_large-cap_stocks\" >Market favors large-cap stocks<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/#Related_articles\" >Related articles<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"A_good_question\"><\/span>A good question<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>About three and a half years ago, I published an article in my blog, please click &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/06\/15\/why-a-company-go-public\/\" target=\"_blank\" rel=\"noreferrer noopener\">Why a company go public?<\/a>&#8220;. Recently, a reader suddenly wrote to me and mentioned this article. Ask me the opposite reason\u2500\u2500\u201cWhy companies don&#8217;t want to go public?\u201d This is really a good question.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Not_cost-effective_to_invest_resources\"><\/span>Not cost-effective to invest resources<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Going_public_costs_a_lot_of_money\"><\/span>Going public costs a lot of money<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In order to go public, a company must prepare for many years, investing resources and considerable costs, which will crowd out the company&#8217;s resources; and after going public, there are still a lot of fixed expenses every year. This is a considerable financial burden for new startups.<\/p>\n\n\n\n<p>French telecom operator Orange announced in September 2024 that it would delist from the New York Stock Exchange (NYSE) considering the financial costs of a secondary listing.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Financial_reports_wastes_resources\"><\/span>Financial reports wastes resources<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Companies listed on the U.S. stock market must release financial reports every quarter, while most other countries require them to release financial reports at least half a year. In order to release financial reports, many key people in various departments of the company must set aside time to prepare for the necessary financial report releases.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Cumbersome_regulations\"><\/span>Cumbersome regulations<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Listed companies have to face more legal regulations than private companies; many companies are unwilling to do so. Being a public company also has its costs, including increased regulatory scrutiny, increased operating expenses associated with expansion and increased transparency for shareholders.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_rich_prefer_privatization\"><\/span>The rich prefer privatization<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Keep_low_profile\"><\/span>Keep low profile<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>For listed companies, basically most of the information must be disclosed. Some people don&#8217;t want their business or financial details made public. <\/p>\n\n\n\n<p><a href=\"http:\/\/edition.cnn.com\/ASIANOW\/asiaweek\/98\/0814\/feat4-2.html\" target=\"_blank\" rel=\"noopener\">Victor Li Tzar-kuoi, the eldest son of Hong Kong\u2019s richest man Li Ka-shing, was kidnapped. In the early days, he was kidnapped by gangsters<\/a> because he was a listed company. <a href=\"https:\/\/www.scmp.com\/magazines\/post-magazine\/short-reads\/article\/2170172\/when-hong-kong-tycoon-gordon-wus-son-was\" target=\"_blank\" rel=\"noopener\">Thoma Wu of Taiwan&#8217;s Taishin Bank also had the same experience of being kidnapped by gangsters<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Dont_want_to_share_profits_with_others\"><\/span>Don\u2019t want to share profits with others<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Especially for companies that are small in size, family-owned companies, or even century-old companies. There are many small and medium-sized companies in Taiwan, and many of them are very profitable. Human nature dictates that there is no need to share the money you earn with others.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Financial_aspects\"><\/span>Financial aspects<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"No_pressure_to_raise_funds\"><\/span>No pressure to raise funds<br><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Most companies go public to raise funds and expand their business scale; however, some companies do not need to raise funds from the public and therefore do not need to use listings to raise funds.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Going_public_is_no_longer_the_only_way_to_raise_funds\"><\/span>Going public is no longer the only way to raise funds<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The methods of raising funds are becoming more and more diversified, and listing companies is no longer the only way to raise funds. Private placements are another popular method of raising capital for businesses.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Special_considerations\"><\/span>Special considerations<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Keep_it_mysterious\"><\/span>Keep it mysterious<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>There are many public or private companies that refuse to go public because they do not want to make the company&#8217;s internal business secrets, core technologies, or operating information public to the public after listing.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"State-owned_enterprises\"><\/span>State-owned enterprises<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In all countries around the world, there are a large number of state-owned enterprises that are not allowed to be publicly listed because of special tasks, legal requirements, or various considerations.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_founders_persistence\"><\/span>The founder\u2019s persistence<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>There is a large, very profitable, and almost universally known national food company in China called &#8220;Laoganma&#8221;, but it has not yet been listed on the market. Because the founder insisted on &#8220;no loans, no financing, no listing,&#8221; even government officials&#8217; repeated suggestions to list the company were rejected by founder Tao Huabi.<\/p>\n\n\n\n<p>Perhaps your first knee-jerk response is that it must be too small to be worth mentioning? &#8220;Laoganma&#8221; is a large-scale enterprise with annual sales of 600 million bottles and revenue of tens of billions. It has been around for decades and has been passed down to the second generation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Capital_market_pressures\"><\/span>Capital market pressures<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Dont_want_to_deal_with_investors\"><\/span>Don\u2019t want to deal with investors<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Listed companies are under too much pressure and must withstand various tests from shareholders and the market. It would cause trouble for the company&#8217;s direction, culture, and operations. Given the trade-off between the two, we decided not to go public.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Market_favors_large-cap_stocks\"><\/span>Market favors large-cap stocks<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Wealth and asset managers, whose funds are getting larger, prefer large-cap stocks because they can have a clear impact on the performance of their funds. The result is that stocks of smaller companies are less popular.<\/p>\n\n\n\n<p>Indexes, or various ways of calculating performance in capital markets, work against small caps.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"178\" height=\"100\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2024\/09\/Stay_private-Custom.jpg\" alt=\"don't want to go public\" class=\"wp-image-30443\"\/><figcaption class=\"wp-element-caption\">credit: Ideogram<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Related_articles\"><\/span>Related articles<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/10\/24\/dont-want-to-go-public\/\" target=\"_blank\" rel=\"noreferrer noopener\">Why companies don&#8217;t want to go public? prefer to staying private<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/06\/03\/us-listed-chinese-companies\/\" target=\"_blank\" rel=\"noreferrer noopener\">Why do many Chinese companies want to be US listed?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/06\/15\/why-a-company-go-public\/\" target=\"_blank\" rel=\"noreferrer noopener\">Why a company go public?<\/a>&#8220;<\/li>\n<\/ul>\n\n\n\n<p><em><strong>Disclaimer<\/strong><\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The content of this site is the author\u2019s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.<\/em><\/li>\n\n\n\n<li><em>I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers&#8217; direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>There are many reasons why companies don&#8217;t want to go public: Listed companies are under too much pressure and must withstand various tests from shareholders and the market. It would cause trouble for the company&#8217;s direction, culture, and operations. Given the trade-off between the two, we decided not to go public.<\/p>\n","protected":false},"author":1,"featured_media":30443,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53],"tags":[],"class_list":["post-30442","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ipo"],"_links":{"self":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/30442","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/comments?post=30442"}],"version-history":[{"count":12,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/30442\/revisions"}],"predecessor-version":[{"id":31367,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/30442\/revisions\/31367"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media\/30443"}],"wp:attachment":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media?parent=30442"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/categories?post=30442"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/tags?post=30442"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}