What are the benefits of Stock Exchange Listing?

[Jeff]

Explain this to me, please.

[Faraz]

Large companies are said to be publicly listed because their shares are traded in the stock exchange market. The majority of entrepreneurs who start-up businesses always have the goal of getting their companies listed especially in the top reputed stock exchange markets like the New York Stock Exchange, London Stock Exchange, NASDAQ among others.

 

Stock exchange listing is a significant determiner of the success of many large companies that we know today like Facebook, Amazon, Tesla, SpaceX, Apple, Google, Microsoft, and Netflix, etc. The importance of stock Exchange Listing for any company can be attributed to some of its benefits including:

 

Liquidity: Stock Exchange listing creates ready liquidity for a company’s shares, which can easily be bought or sold at a profit. When a company’s shares are listed in the stock exchange listing, it means more sellers and buyers can freely access the shares to sell or buy at any time and that is what creates liquidity.

 

Financing: Companies benefit from stock exchange listing by increasing their capacity to raise funds. When people buy a company’s share, it gets the needed financing to run operations, expand its reach, and sustain competitive advantages. When a company is publicly listed, it can raise more money by issuing more shares to be bought and sold in the stock markets where it is listed.

 

Access to best talents: Companies that are listed in the stock market can set up stock options plans, which give the company a strategic advantage for attracting and getting the top talents as their employees.

 

Market Visibility: Stock exchange listing also boosts a company’s market visibility. Stock exchange listing means that the company is publicly traded and therefore accessible and known to the public majority. This visibility not only drives up share price but also helps improve and sustain brand equity.