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This question is about employer.
What happens to an employee when a company goes public?
When a company goes public, an employee normally has the opportunity to purchase a limited amount of shares at their company's initial offer price. Taking a company public means the company is making its initial public offering (IPO), which indicates the company is now a publicly traded and owned company.
A company goes public when it is looking to raise capital for future operations, expand its business, and stimulate growth. For employees, this can lead to a couple of different outcomes concerning stock options, or sometimes no changes relative to them at all. The most common outcomes for employees are:
The opportunity to gain restricted stock units (RSUs)
Stock options
Organizations and businesses go public usually with the hopes of raising capital for growth and expansion. Going public helps a company in terms of building prestige within a specific industry or the financial sector as a whole.
Taking a company public helps to:
Raise capital for future operations
Expand business in terms of services, products, and scope
Lead to acquisitions, where a company can buy out certain competitors
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