Becoming a Publicly Held Corporation
by PHILIP J. SANDMAIER, JR. Partner, Executive Office
Presented before a technical session of the Baltimore Chapter of the National Association of Accountants—May 1961
BALTIMORE'S population is exploding along with that of the rest of the nation, and its business is expanding. To what extent, though, is the subject of my talk with you here tonight—Becoming a Publicly Held Corporation—applicable in your city? I would like to show you.
How many United States businesses in private hands do you think will become publicly owned corporations in the next fifteen years? 5,000? 10,000? 15,000? A well-regarded speaker gave his opinion recently
in a talk before a group of the American Management Association—
30,000 privately held companies, he predicted, will go public in the next fifteen years.
Since Baltimore's metropolitan population of 1.7 million represents in excess of 1½ per cent of the country's metropolitan population, the prediction I just quoted when applied to Baltimore indicates that in the next fifteen years approximately five hundred companies in your area will obtain capital from the public for the first time. In the manner of Madison Avenue in some of its TV commercials, I could well point to any section of this room and say, This could be you!
All of this seems to me to indicate the timeliness of a discussion on those companies whose position renders it desirable for them to consider going public.
In the short time we have available I should like to touch on four areas:
• What leads to the public offering of privately held shares?
• What are the various mediums through which capital can
• What are some accounting matters encountered in an SEC
• What are some problems after the public enters into the ownership?
REASONS FOR PUBLIC OFFERING
First—what are some of the forces that lead to a decision to make an initial public offering?