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In the midst of mounting inflation, supply shortages, geopolitical turmoil, threats of cyberattacks and continuing COVID-19 concerns, public stock prices are expected to fluctuate in the coming months. This situation has unsettled shareholders and makes long-term strategic planning challenging. Now might be a good time to consider getting off the rollercoaster by taking your company out of the public eye.<\/p>\n
While public companies enjoy easier access to capital, some small- and mid-market public companies may benefit from delisting. \u201cGoing private\u201d stabilizes a company\u2019s value, because it allows management to focus on long-term<\/em> goals rather than satisfying Wall Street\u2019s demand for short-term<\/em> profits. Plus, it can reduce compliance costs, lower taxes and eliminate much public and regulatory scrutiny.<\/p>\n But going private can be nearly as complex as going public. So it\u2019s important to understand the financial reporting requirements before you take the plunge.<\/p>\n SEC requirements<\/strong><\/p>\n Among other requirements, a company that\u2019s going private \u2014 together with its controlling shareholders and other affiliates \u2014 must file detailed disclosures pursuant to Securities and Exchange Commission (SEC) Rule\u00a013e-3.<\/p>\n The SEC scrutinizes such transactions to ensure that unaffiliated shareholders are treated fairly. To comply with SEC Rule\u00a013e-3 and Schedule\u00a013E-3, companies must disclose:<\/p>\n Failure to act with the utmost fairness and transparency can bring harsh consequences. The SEC\u2019s rules are intended to protect shareholders, and some states even have takeover statutes to provide shareholders with dissenters\u2019 rights. Such a transition results in a limited trading market to be able to sell the stock.<\/p>\n Handle with care<\/strong><\/p>\n Going private certainly isn\u2019t for every public company, and other possible remedies exist for problems such as high compliance costs and corporate governance risk. But if the timing\u2019s right and your shareholders are supportive, going private could be a great way to improve your company\u2019s outlook.<\/p>\n Beware, however, that going-private transactions require diligence to withstand SEC scrutiny and prevent lawsuits. If you\u2019re planning to delist your company\u2019s stock, we can help structure and report your transaction to ensure transparency, procedural fairness and a fair price. Contact us to determine what\u2019s right for your company\u2019s situation.<\/p>\n \u00a9 2021<\/em><\/p>\n <\/body> In the midst of mounting inflation, supply shortages, geopolitical turmoil, threats of cyberattacks and continuing COVID-19 concerns, public stock prices are expected to fluctuate in the coming months. This situation has unsettled shareholders and makes long-term strategic planning challenging. Now might be a good time to consider getting off the rollercoaster by taking your company […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13,7,10],"tags":[8,11,12],"class_list":["post-15622","post","type-post","status-publish","format-standard","hentry","category-aa","category-articles","category-news","tag-articles","tag-news","tag-updates"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/15622","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=15622"}],"version-history":[{"count":0,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/15622\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=15622"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=15622"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=15622"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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