English Deutsch Français Italiano Español Português 繁體中文 Bahasa Indonesia Tiếng Việt ภาษาไทย
All categories

Recent trends indicates companies listed on board are starting to reverse back to privatisation.

2007-11-20 16:28:13 · 3 answers · asked by joshua t 1 in Business & Finance Corporations

3 answers

Advantages and Disadvantages of Delistings
Companies may decide to deregister for a variety of reasons that can be either good or bad for shareholders. A few of the most common reasons include:
Capital Savings - The costs of being a publicly traded company are substantial and are occasionally difficult to justify with a low market capitalization, especially after Sarbanes Oxley laws called for increased disclosures. As a result, deregistering can save a company millions and reward shareholders with a higher net income and earnings per share (EPS).

Strategic Move - Shares of the company may be trading below intrinsic value, compelling the company to acquire its own shares as a strategic move. This typically results in shareholders being rewarded with substantial returns over the short term.

Regulatory Concerns - Stock exchanges such as the Nasdaq and New York Stock Exchange have minimum requirements to remain listed. If a company does not meet those requirements, it may be forced to delist itself. Causes for delisting may include failure to file timely financial reports, lower-than-required stock price, or insufficient market capitalization. (For more see, The Tale Of The Two Exchanges. )
In the end, companies can have a clear bottom-line incentive for delisting their stock from public exchanges - it's not always a bad thing!

2007-11-23 23:12:54 · answer #1 · answered by Sandy 7 · 0 0

There are 2 questions there really: What is the point of them and why were they foisted on us. The point of them is to make money for their (mostly foreign) shareholders by selling us water for a profit. Why we got them is because we elected a conservative government who thought it was clever to sell off the assets OWNED BY THE PEOPLE to profiteering businesses (or, in some cases back to some of the people who could afford to buy shares) in order to to pay for government spending in the short-term without raising taxes. They also assumed that state ownership and control necessarily meant sloppy practices and inefficient operations and that privatised industries would be more efficient. As a consumer, the only effect on me is that I no longer own the utilities that are essential to survival and that prices have risen well ahead of inflation, now including a profit margin that was not there before. The insane inadequacy of the fragmented railway system shows better than anything how misguided the sell-off policy was. The fact that we are now dependent for the day-to-day essentials of life on foreign countries (or, more to the point that they now own an control OUR natural and infrastructure assets) is unforgivable. As you rightly say, I get no choice about the water company that has bought rights to be a monopoly supplier in my huge area of the country. It is immoral and unacceptable. If there cannot be real competition, then it needs to be owned and controlled BY the people FOR the people.

2016-05-24 10:07:54 · answer #2 · answered by ? 3 · 0 0

Because then they don't have to answer to shareholders.

2007-11-20 16:57:41 · answer #3 · answered by kwilfort 7 · 0 0

fedest.com, questions and answers