Why do companies go public?
The U.S. IPO market saw a boom in the past 2020, and many companies went public and raised considerable money. The debuts of many companies, especially those technology groups won success.
Snowflake became the biggest software IPO
$Snowflake Inc(SNOW.US)$, the cloud computing provider, which priced its initial public offering at $120 a share, raised nearly $3.4 billion from the IPO in September 2020, while Warren Buffett also invested in snowflake. The excellent performance of its debut made it the biggest software IPO ever.
Because of the strong demand, the stock soared 112% on the first day after IPO. Other high-flying tech companies like Snowflake including $C3.ai Inc(AI.US)$ and $DoorDash, Inc.(DASH.US)$ also have done well in their IPO in 2020.
Source: CNBC
Why go public？
Companies go public mostly for raising money and usually a lot of it, and there are other different reasons including:
To raise capital and potentially broaden opportunities for future access to capital, including issuing more stocks.
To increase liquidity for a company's stock, which makes it possible to implement employee stock ownership plans and thus help to attract top talent.
To merge and acquire other businesses with public stock.
To create publicity, brand awareness, or prestige for a company.
However, after going public, these companies also need to undertake obligations such as financial disclosure.
The Blooming market also makes it possible for startups to go public and seek to expand their businesses. Although current global uncertainties are expected to continue into 2021, the market still remains optimistic about the IPO market.
Source: Investopedia, Sec.gov
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