2. Advantages and disadvantages of IPOs Aa Aa An initial public offering (IPO) refers to the first sale of a company's stock to the public through the stock market. Once a company launches its IPO, it changes from a privately held company to a publicly traded company. Visa, AT&T, Kraft Foods, UPS, CIT Group, Conoco, The Blackstone Group, Travelers, Goldman Sachs, and Agere Systems are among the firms considered to have issued the largest IPOs in U.S. history, each selling for more than $3.5 billion. These companies, along with thousands of other companies whose stock trades in equity markets across the globe, reap the benefits of going public. The following table describes some advantages and disadvantages of going public in the United States. Identify whether each description is an advantage or a disadvantage of going public from the perspective of a company and its owners. Advantage Disadvantage Description Once a company goes public, its stock can be traded easily in the equity markets. A public company needs to report its quarterly and annual earnings and ensure that these reports are compliant with SEC regulations. Once a company goes public, its exposure to proxy fights and tender offers increases, and managers have to work harder to maintain control. A publicly traded company generally receives more visibility, which helps the firm access more potential markets. O Flash Plaver MAC 32.0.0.433