reasons for a publicly trades company to go private?

I am reading the news that Dell will attempt to go private in a multi-billion share buyout, and it states that:

[Michael Dell] will attempt a revival of his struggling computer
company without Wall Street scrutiny.

Dell's board had considered everything from a recapitalization to a
breakup of the company before going the leveraged buyout route

What are the pros and cons for a publicly traded company to go private?

Shares Private Label

asked Feb 6 '13 at 21:33

6152142613526
68 points

I am not sure that this question would be a good fit for the startups site. – Karlson 11 years ago
@Karlson: sorry if it is not. It's clearly much later in the process of creating a start-up company that one needs to decide between public/private, but I though I would ask what are the implications between public/private ownership in lieu of the recent announcement by Dell. – 6152142613526 11 years ago

1 Answer

Karlson is of course correct that few startups would ever consider this question when they are typically facing the myriad of other challenges that startups must confront.

However, if this answer might benefit an entrepreneur with an unusually far-sighted business plan:

Pros of returning private--

Consolidating legal authority for the executive and chairman of the board
Reducing exposure to oversight from the SEC
Consolidating equity ownership

Cons--

Less access to funding
May anger smaller investors
Potential for liability in the transition

answered Feb 7 '13 at 00:44

Yorick
826 points