Publicly Traded Companies: A Beginner's Guide

Publicly traded companies are a crucial part of the stock market, but they can be intimidating for beginners.

To be listed on a major stock exchange, a company must meet certain requirements, such as having a minimum market capitalization of $250 million.

Publicly traded companies issue shares of stock to raise capital, which can be bought and sold by anyone. This allows companies to grow and expand their operations.

These companies are required to disclose their financial information to the public, making it easier for investors to make informed decisions.

A public company is one that issues shares that are publicly traded, meaning the shares are available for anyone to buy and sell on the open market. This doesn't mean the company is publicly owned, though - it's still controlled by its board of directors and management team.

Public companies must comply with specific reporting requirements set by the Securities and Exchange Commission (SEC). They must submit financial statements both quarterly and annually, and additional documentation is required in the event of material changes to the business.

To become a public company, a company can issue an initial public offering (IPO) of shares, which converts its private equity holdings into publicly traded shares. Alternatively, it can be acquired by or merge with a special purpose acquisition company (SPAC).

Public companies must have a board of directors to oversee the company's management team, approve compensation packages, and ensure compliance with applicable accounting standards. Company insiders, such as board members and executives, must publicly disclose all purchases and sales of the company's stock.

Here are some examples of public companies:

A company is considered public once it meets certain criteria, including selling securities in an IPO, reaching a certain size in terms of investor base, or voluntarily registering with the SEC.

Stock exchanges are places where investors buy and sell shares of stock, with several types existing, including auction markets like the NYSE and dealer markets like the Nasdaq.

The NYSE and Nasdaq are two of the largest stock exchanges in the U.S., with the NYSE listing thousands of companies, including Berkshire Hathaway, which has a market cap of $912 billion.

These stock exchanges are regulated, and companies must meet strict listing requirements to be listed on them.

Here are the 5 largest companies listed on the NYSE and Nasdaq as of August 2024:

Stock exchanges are places where investors buy and sell shares of stock, both online and in physical locations.

There are several types of stock exchanges, including auction markets like the NYSE and dealer markets like the Nasdaq.

Without stock exchanges, investors would have to either buy shares directly from the companies they want to invest in or find other investors who own shares they want to sell.

Stock exchanges are regulated, and companies must meet strict listing requirements, especially in the cases of the NYSE and Nasdaq.

There are several stock exchanges in the U.S. and many more internationally, collectively making up the stock market.

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The New York Stock Exchange, or NYSE, is home to thousands of companies, but here are the five largest as of August 2024. Berkshire Hathaway is a conglomerate with more than 60 subsidiary businesses, including GEICO, Duracell, Dairy Queen, Pilot Travel Centers, and dozens more.

These companies are among the largest in the world, with market caps in the trillions of dollars. Berkshire Hathaway's market cap is $912 billion, making it the second-largest company listed on the NYSE.

Eli Lilly is a pharmaceutical manufacturer with a long list of products to treat a variety of conditions. Its market cap is $912 billion.

Taiwan Semiconductor is a chipmaker that makes components for personal computers, mobile devices, servers, data centers, and more. It has a market cap of $890 billion.

JPMorgan Chase is the largest bank in the United States in terms of asset size, with a market cap of $640 billion. It has $2.4 trillion in deposits and $1.3 trillion in loans.

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Walmart is the largest physical retailer in the United States and also has a substantial e-commerce operation. Its market cap is $621 billion.

Here are the five largest NYSE companies listed, along with their market caps:

The stock market is made up of multiple sectors that you may want to invest in. There are 11 stock market sectors in total.

The Nasdaq stock exchange is a tech-heavy index, and it includes several of the world's largest companies. Apple is the largest company in the stock market today, with a market cap of $3.2 trillion.

Companies can become publicly traded through an initial public offering (IPO) or by being acquired by a special purpose acquisition company (SPAC). The IPO market was down in 2024, but there are still top upcoming IPOs to learn about.

Here are the five largest Nasdaq companies as of August 2024:

In the world of stock market sectors and IPOs, there are many publicly traded companies that aren't as well-known as some of the bigger names. One of these lesser-known groups is the OTC list, which includes companies that trade on the over-the-counter markets.

Here are five of the largest companies that trade on the OTC markets:

These companies are all foreign and are also listed on other major stock exchanges around the world. They include:

These companies are all massive conglomerates with a wide range of products and services. For example, LVMH owns brands like Tiffany & Co. and Christian Dior, while Nestle owns brands like Perrier and Gerber.

The IPO market can be a wild ride, and 2024 was no exception. The IPO market was down in 2024.

As we look to 2025, it's essential to understand what's driving the IPO market. A reporting company, also known as a public company, must meet the same reporting requirements with the SEC as public companies. However, it doesn't necessarily have to undergo an IPO.

One thing to keep in mind is that the Nasdaq stock exchange is a tech-heavy index that includes several of the world's largest companies. In fact, the five largest Nasdaq companies are the five largest companies that trade on U.S. stock exchanges as of August 2024.

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Here are the top 5 largest Nasdaq companies:

These companies are household names and have a significant presence in the market. As we look to 2025, it's essential to keep an eye on these companies and their IPOs.

The stock market is made up of multiple sectors you may want to invest in. There are 11 stock market sectors in total.

The larger stock market is composed of these sectors, each with its own unique characteristics and investment opportunities.

Investing in the stock market sectors can be a great way to diversify your portfolio and potentially increase your returns.

However, it's essential to understand what each sector entails and how they contribute to the overall market.

Bonds are often considered a "safe" investment.

Bonds are debt securities issued by companies or governments to raise capital.

They work by the borrower (issuer) promising to repay the lender (investor) with interest.

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Bonds are typically sold at a face value, and the investor earns interest on that value.

The interest rate is the yield, and it's usually expressed as a percentage of the face value.

Investors can choose from various types of bonds, including government bonds and corporate bonds.

Government bonds are backed by the credit of the government, making them generally considered low-risk.

Corporate bonds, on the other hand, carry a higher risk, but also offer higher yields.

Bonds are often used as a way to diversify a portfolio and reduce overall risk.

Investors can buy bonds directly from the issuer or through a brokerage firm.

It's essential to do your research and consider your personal financial goals before investing in bonds.

Bonds can be a good option for those who want a predictable income stream.

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To research a publicly traded company, you can start by looking up its company profile. Hoover's Company Profiles, available through ProQuest's Business Market Research Collection, covers over 40,000 public and non-public companies, including location, summary financials, top officers, top competitors, and industry analysis.

Company profiles like these can give you a quick overview of the company's history, leadership, and market position. MarketLine Advantage and S&P Global NetAdvantage also provide company profiles, along with SWOT analyses and other research tools.

If you want to dive deeper into a company's financials, you can search for its SEC filings on the EDGAR database or use Mergent Online to access financial information on over 14,000 active and inactive U.S. public companies.

Public companies in the United States are required by the Securities and Exchange Commission (SEC) to submit both annual and quarterly financial statements.

To access these financial statements, you can visit the SEC's EDGAR database, which is an open access database that contains electronic filings from 1994 to the present.

The SEC requires public companies to have a board of directors to supervise the company's management team.

You can also search for financial information on public companies through Mergent Online, which provides access to financial data on over 14,000 active and inactive U.S. public companies listed on the NYSE, AMEX, and NASDAQ exchanges.

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S&P Global NetAdvantage is another resource that offers comprehensive financial information on public companies, including industry surveys, equity and industry research, and mutual fund information.

If you're looking for a more general overview of company financials, you can use the table below to see the largest publicly traded companies in the United States, along with their market capitalization and sector:

These resources can provide you with a wealth of information on public company financials, including their market capitalization, sector, and more.

To research a company's history, you can start by looking at their historical annual reports. These reports are available for over 800 companies dating back to 1884.

You can access these reports through a link that opens in a new window. This is a great resource for getting an overview of a company's past performance and growth.

If you're looking for more comprehensive financial information, you can also try Mergent Online. This database contains financial information for over 14,000 active and inactive U.S. public companies listed on the NYSE, AMEX, and NASDAQ exchanges.

You can use Mergent Online to search for the financial information you need, including Investext reports.

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Investing in public companies can be a great way to grow your wealth, but it's essential to understand the basics first. A public company is one that issues shares that are publicly traded, meaning anyone can buy and sell them on the open market.

To invest in a public company, you can buy shares through a brokerage account or a broker, just like you would buy shares of a publicly traded company. You can even buy ETF shares, which are similar to public companies but trade on stock exchanges.

To get started, you'll need to know the ticker symbol of the public company you're interested in, which can save you a lot of time when researching. You can find this information by searching online or using a database like Mergent Online.

Some popular resources for researching public companies include EDGAR, Mergent Online, and S&P Capital IQ, which provide access to a wealth of financial information and data. You can also use these resources to search for electronic filings from the SEC and find the financial information of over 14,000 active and inactive U.S. public companies.

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Here are some popular resources for researching public companies:

ETFs are a great way for beginners to invest in the stock market, allowing you to buy many stocks and bonds at once.

Berkshire Hathaway, a conglomerate owned by Warren Buffett, is an example of a company that owns a diverse range of publicly traded stocks, including Apple, Bank of America, and Coca-Cola.

You can buy ETF shares just as you would buy shares of a publicly traded company through a brokerage account or a broker.

The companies listed in the chart, including Visa and Exxon Mobil, have a combined market capitalization of around $10 trillion.

Being publicly listed allows a company to be properly valued by the market, which can help investors build long-term wealth.

Visa dominates the financial services industry, generating high margins alongside Mastercard, despite facing competition from digital payments companies.

Exxon Mobil remains a force in the energy sector, generating bumper profits when oil prices are high.

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Public companies have access to the financial markets and can raise money for expansion and other projects by selling stock or bonds. This allows them to grow and develop their business.

Selling stocks gives the founders or upper management of a company the opportunity to liquidate some of their equity. A corporate bond is a type of loan issued by a company to raise capital.

Having stocks trade on a major market like the New York Stock Exchange gives a company a certain level of clout. A company must have achieved a certain level of operational and financial size and success to transition to being publicly traded.

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Investing in public companies comes with some significant drawbacks.

One major disadvantage is the loss of control for the majority owners and founders of the corporation. This is because public companies must comply with strict corporate governance bylaws.

Public companies must meet stringent reporting standards regulated by government entities. They must file reports with the SEC on an ongoing basis, including quarterly financial reports called Forms 10-Q.

These reporting requirements can be costly and time-consuming, adding to the expenses of maintaining a public company. Companies must also file current reports on Form 8-K to report certain events, such as the election of new directors.

Shareholders have the power to control many of the company's decisions, including mergers and acquisitions and corporate structure changes. This means that public companies must answer to their shareholders and bring certain activities up for approval.

The Sarbanes-Oxley Act sets the stage for these reporting requirements, intended to prevent fraudulent reporting.

Going private can be a complex process, and it's essential to understand the reasons behind it. A public company may decide to go private to free up resources for research and development, capital expenditures, and funding pension plans for its employees.

There are many reasons why a public company may want to avoid the costly and time-consuming regulatory requirements of being a public company. This can be a significant burden, especially for companies that want to focus on innovation and growth.

A "take private" transaction is necessary to transition a company from public to private. This involves a private equity firm or consortium of firms purchasing or acquiring all the outstanding stock of the publicly-listed company.

Securing additional financing from an investment bank or lender is often required to complete the deal. This can provide the necessary loans to help finance the transaction.

The company will be delisted from its associated stock exchanges once the purchase of all outstanding shares is complete. This marks the end of the company's public operations and the beginning of its private operations.