A “publicly held” company refers to a company that has sold a portion of its equity, in the form of shares, to the public through an initial public offering (IPO) or through being acquired by another company that is already public.
The shares of publicly held companies are traded on stock exchanges, making them available for purchase by individual and institutional investors. Being publicly held allows a company to raise capital for growth, acquisitions, or to reduce debt, among other uses.
However, it also means that the company is subject to regulations by entities such as the Securities and Exchange Commission (SEC) in the U.S., and they are required to disclose financial and other information regularly to provide transparency to investors.
Examples of publicly held companies are well-known corporations like Microsoft, Apple, Amazon, and Google’s parent company, Alphabet. These companies’ shares are all available for trade on stock exchanges, and they must adhere to the transparency and reporting guidelines established by their respective regulatory authorities.
Example of “Publicly Held”
Let’s take the example of Apple Inc.
Apple Inc. is a publicly held company because its shares are owned by various individual and institutional investors who bought them in the open market. Apple became a publicly held company on December 12, 1980, when it conducted its Initial Public Offering (IPO), offering its shares to the public for the first time.
As a publicly held company, Apple’s shares are traded on the NASDAQ Stock Market under the ticker symbol “AAPL”. This allows virtually anyone, from large financial institutions to individual investors, to buy a piece of the company and thereby become part-owners.
Furthermore, as a publicly held company, Apple is required to disclose a significant amount of financial and operational information to the public. This includes quarterly financial reports, details of any significant corporate events, and an annual report that provides a comprehensive overview of the company’s performance throughout the year. All of these reports are meant to provide transparency to the shareholders and the general public, allowing them to make informed investment decisions.