private or public
Glencore was ranked as tenth in the Fortune Global 500 list in 2014.It is a big family business and focus on global energy commoditity resources. Glencore may need to back to private after floated more than four years and the downtown problems in stock market.This news made me to think the risks and the preparation for big companies to go public.
There are many ways for business to gain the capital to grow, like long term loan, and sales revenue. Glencore choose to go public.For Glencore ,become a public company means it can have a huge amount of capital with out paying back ,Glencore can use the capital to improve research and development which is important for energy related companies. Better R&D benefits the company in the long run as a competitive advantage. However,as public company need to take more stakeholders in to account, conflict objectives of stakeholders always make things more complex ,shareholders want rise in share price and dividents , government want to see the relative stable performance of company as Glencore maybe too big to fail . Stakeholders actually forced the company to face the pressure of financial reports which made the company focus more on short-term results than long-term growth.In that stage many companies include Glencore failed to balance the short term and long term profit ,and once problems occur the price of stock always violently float which no stakeholder would like to happen.
I think for big private companies, When managers plan to change to public companies, considering the long term expects and conflicts, risks of fail in stock market and abilities of control the scale of growth are needed.
News:http://www.thetimes.co.uk/tto/business/industries/naturalresources/article4571522.ece
Pic:http://www.thetimes.co.uk/tto/business/industries/naturalresources/article4571522.ece
Li jiayue 28/9/2015
