What are the main disadvantages of going public?
A. One major disadvantage of going public is reduced access to capital markets.
B. One disadvantage of going public is decreased liquidity. The original owners of the company find it more difficult to sell their shares because of insider-trading laws.
C. One of the major disadvantages of an IPO is that once a company becomes a public company, it must satisfy all of the requirements of being a public company such as SEC filings and listing requirements of the securities exchanges.
D. When investors diversify their holdings, the equity holders of the corporation become more widely dispersed. This lack of ownership concentration undermines investors' ability to monitor the company's management, and investors may discount the price they are willing to pay to reflect the loss of control.