What Does "First To Market" Mean?

A listed company refers to a company limited by shares issued by the State Council or a securities regulatory authority authorized by the State Council for listing on a stock exchange.

listed company

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A listed company is a company whose shares have been approved by the State Council or a securities regulatory authority authorized by the State Council.

The so-called unlisted enterprise refers to a company limited by shares whose shares are not listed and are not traded on the stock exchange. A listed company is a type of company limited by shares. In order to list and trade on a stock exchange, such companies must meet certain conditions in addition to approval.

The amendments to the Company Law and the Securities Law will help more companies become listed companies and

1. The listed company is a company limited by shares. A company limited by shares may be an unlisted company, but the listed company must be a company limited by shares.

2. Listed companies are subject to the approval of the competent government department. According to the "Company Law", the listing of a company limited by shares must be approved by the State Council or the securities administration department authorized by the State Council.

3. Stocks issued by listed companies

   1. The shares have been issued to the public with the approval of the securities administration department of the State Council;

   2. The company's total share capital is not less than RMB 30 million;

   3 Publicly issued shares account for more than 25% of the company's total shares; if the total share capital exceeds 400 million yuan, the proportion of public issuance to the public is more than 10%;

   4 The company had no major illegal acts in the last three years, and there were no false records in its financial accounting report.

   Most companies have a shareholding system. Of course, if the company is not listed, these shares are only held by a small number of people. When the company develops to a certain degree, it needs funds for development. Going public is a good way to attract funds. The company puts some of its shares on the market and sets a certain price to allow these shares to be traded on the market. The money from the sale of shares can be used to continue development. The shares represent a part of the company. For example, if a company has 1 million shares, the chairman holds 510,000 shares, and the remaining 490,000 shares are sold on the market, which is equivalent to selling 49% of the company to the public. Of course, the chairman can also sell more shares to the public, but then there is a certain risk. If a malicious buyer holds more shares than the chairman, the ownership of the company will change. In general, there are advantages and disadvantages to going public.

   benefit:

   1. Get funding.

   2. The owner of the company sells a part of the company to the public, which is equivalent to asking the public to bear the risk with himself. For example, if the company holds 100% of the shares, it will lose 100%, if it loses, it will only hold 50%.

   3 Increase shareholder liquidity.

   4 To escape bank control, you no longer need to rely on bank loans.

   5. Improve company transparency and increase public confidence in the company.

   6. Increase company visibility.

   7. If certain shares are transferred to managers, the contradiction between managers and company holders can be alleviated, that is, the agency problem.

   harm:

   1. It costs money to go public.

   2. Improving transparency also exposes many secrets.

   3 Shareholders must be informed of company information every time after listing.

   4 May be maliciously controlled.

   5. At the time of listing, if the price of the shares is set too low, it will be a loss to the company. In fact, this is the practice. Almost all companies will set the stock price higher when they go public.