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Strength Case

Essay by   •  December 17, 2012  •  Term Paper  •  243 Words (1 Pages)  •  1,082 Views

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The advantages of going public through an IPO are; it will result in an increase in capital for the company. This will also place value on the company's stock, and the consumers or insiders will be able to sell their stock or use it as collateral for larger loans and other financing needs (Lewis & Kappes, 2012) . Normally with an IPO a company's debt-to-equity ratio will improve after the first offering t the public.

When acquiring another organization within the same industry can have its own strengths. One of the main strengths this can have is to outdo your competition. This can give you a leg up when you and your competition are on the same page and are in agreement to what needs to be done to make a better profit. If a company buys out another company to make their own they can increase profit and its stock options. When acquiring another business within the same industry, loans and other financial option become easier to pursue.

When companies merge they allow the companies to acquiring new investment with the surplus money available. Perhaps, the organization may invest in larger investment to yield more profit (Williams, 2008). Not only can this help new investments but this can also combine you and your competition or make it so that you have less competition out there so that you have a larger profit increase when you merge with other companies (Strategic-Acquistions.com, NA).

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