Think about it, everything a person STARTS or OWNS will eventually belong to another person. Take Cargill for instance they are the largest private company, but what happens when the owner dies gives the stock to their kids and then they decide the company is a waste of time and they want to be a doctor? SO eventually won't ALMOST all companies be sold on the exchange?
2007-09-29 17:52:42 · 8 answers · asked by Programmer 3 in Business & Finance ➔ Investing
The Cargills, and the inlaws the MacMilans, who ran the company when W. W. died, havent tired of the money yet. They are on the Forbes list, and some of the richest people in Minnesota. Some of the third generation are still living. Cargill pays a dividend once in a while on the shares the family, and a few others own. Since the shares are only held by a few people its a large dividend. The danger is that as it is passed down to more and more descendants the dividends may become smaller as the shares are spread over more holders if company profits dont keep up. Regardless of that they may pursue careers. One of the second generation of MacMillans became a professor in mathmatics, but he probably benefited from the company. The company is largely run by nonfamily members now. They dont have to work in the company to draw money from it. And many dont even in smaller businesses. They're sometimes set up as partnerships and some of the partners pursue other careers while someone else manages the business. The partners draw a share of the profits.
Another private family owned company that has done quite well, although nowhere near the level of Cargill, yet, is the True Companies. The founder was worth about 250 million when he died in 1994. Family members still manage the various businesses. But there's no reason any company has to go public. There just has to be liquidity in the business.
2007-09-29 20:17:47 · answer #1 · answered by jeff410 7 · 0⤊ 0⤋
The vast majority of privately held companies NEVER go public. When the owners die, either someone in the family continues running it, the company is shut down or the company is sold to someone else who keeps it private. Very few get to the size of Cargill.
As for Cargill -- it is only the second largest privately held company. The company was founded in 1865 -- so the owner died years and years ago. Most of his descendants are not involved in the business -- but have plenty of money to become doctors or celebutantes if they like. Selling is not important to them.
In addition -- companies are not sold on an exchange. The processof going through an IPO is not controlled or even monitored by stock exchanges. Most companies that go public trade OTC at first. Even those that do trade on an exchange are taken public through a public auction that is run by a syndicate of investment banks.
2007-09-30 06:58:36 · answer #2 · answered by Ranto 7 · 0⤊ 1⤋
there are a lot of family owned businesses (private owned) that have enough pride to want to keep it all within the family all the time. i don't think it's accurate to say that almost all companies will eventually be sold on the exchange.
just my opinion on the matter - i'm not sure if there's any real evidence to back it up either way.
2007-09-29 17:56:58 · answer #3 · answered by flirtyme27 2 · 1⤊ 0⤋
companies pass public so human beings can placed money into them by way of possession of shares. usual reason companies pass public so they might income extra capital and use that money to improve. some enterprise do purchase back shares to decrease the quantity of dazzling shares and leverage with bonds to improve the enterprise's fee and share fee. each and every so often debt financing is extra alluring to coporates which will truly improve enterprise fee.
2016-10-20 08:42:04 · answer #4 · answered by ? 4 · 0⤊ 0⤋
More and more companies are being bought and converted to private companies.
No, all private companies do not have to go public. They can be passed to other private individuals or PRIVATE EQUITY FUNDS.
2007-09-29 17:57:32 · answer #5 · answered by Anonymous · 1⤊ 0⤋
Some companies went public ,
Then went back ( Levis Strauss ) .
Some do , does not mean they have to .
Or that it is good . . .
>
2007-09-29 17:58:21 · answer #6 · answered by kate 7 · 0⤊ 0⤋
whatever happens ...money is locked in the company
and money cud be used ...they are nt liquid So Co. cud use it ...
even if sons have it afterhe dies...money is still ther in Co, being used somewhere...so its of use anyways Even if son sells shares ...Still money will be in Co,
2007-09-29 17:58:57 · answer #7 · answered by samuel 1 · 0⤊ 0⤋
you stated a fact. What is the question?
2007-09-29 17:56:16 · answer #8 · answered by hahagoodguy 2 · 1⤊ 0⤋