Creating Value

Michele Collini's Blog
28/09/2022 Stock Exchange Listing

Stock Exchange Listing – how it works, who can access it

Stock Exchange Listing – how it works, who can access it

In order to issue shares, a company must list on the stock exchange.

The stock exchange today is entirely telematic, operations and titles are managed and traded through superfast computers, including automated procedures, thanks to dedicated software.

A company that intends to open up to the market begins offering its shares with an IPO: initial public offering.
Based on supply and demand, the performance of the value of the stock is determined.

With an IPO, shares are sold in the primary market, where investors are usually institutional players. The company receives cash only when it first issues shares. In the second stage, once the company goes public, its shares can be bought and sold to all traders in the secondary market.

Through these transactions, investors are allowed to acquire parts of the company’s property more easily and quickly.

So why should we list on the stock exchange? What are the advantages?
Two stakeholders: investors and company, let’s see the advantages of both sides.

For investors:

  • if someone wants to buy an equity part of a company, if it is not listed, one has to proceed with private agreements with the ownership and this is not exactly so easy;
  • if, on the other hand, a Company (SPA) is listed on the stock exchange, it is sufficient to turn to the market, follow its rules and proceed with the purchase;
  • listed companies are subject to strict transparency laws unlike unlisted companies. This offers more protection and guarantees to investors.

For listed companies:

  • companies list on the stock exchange in order to receive capital as a result of their expansion and a need for development, investment in infrastructure, machinery and other growth projects;
  • listed companies have greater visibility and this is a benefit, as they improve their image in front of investors and consumers;
  • a listed company is generally considered more trustworthy than an unlisted one.
Let’s talk about it together
Michele Collini