When a company goes public, does that mean that it is 100% public? I just saw this infographic. And after I saw the last pie divided I wondered if companies are actually give only a percentage of the company for public trading.
Anytime a company takes investments they have to decide what portion of the company is for sale. If they decide to sell 25% of the company through an IPO, then 75% of the company remains in the hands of the founders, initial investors, officers and early employees.
Over the decades after the IPO the entire company may be sold to individual investors. When Microsoft was founded there were two owners. Now Bill gates owns a minority share of the company
For the first time in Microsoft's history, nearly 40 years after Bill Gates founded the company in 1975, he is no longer its largest individual shareholder. That title now belongs to Steve Ballmer, who served as CEO from 2000 to 2014.
In an April 30 filing, Gates revealed that he sold 4.6 million shares for roughly $186 million pre-tax. He now owns 330 million shares, 3 million less than Ballmer, his Harvard pal who later joined him at the Seattle company. Gates’ cofounder Paul Allen, who apparently had a smaller stake than Gates from the outset, sold most of his shares years ago.
Gates, Ballmer and Allen all amassed massive fortunes building Microsoft into a software giant. Gates became the wealthiest man on the planet, with a fortune of $77 billion. Ballmer got $20 billion, good for 34th richest in the world. And Allen, one of Gates’ childhood buddies, is now worth $16 billion, making him the 55th richest.
Gates remained heavily involved in company operations until June 2008, when he stepped back to focus on giving away the fortune Microsoft made him. Gates has been the richest man in the world for 15 of the last 20 years, despite having already given away at least $28 billion. He now owns 4% of Microsoft, a stake worth $13.3 billion. The bulk of his fortune is kept in his private firm Cascade Investment.
When they initially took on investors they didn't sell 90% of the company. But over time those initial officers have sold the majority of their shares.
Whenever a company takes equity funding, rather than a loan, some portion of the control of the company needs to be given up by some portion of the owners in exchange for the money. Effectively, the company is taking on new partners.
When a corporation takes funding, whether public or otherwise, it's taking $X for Y% ownership of the company. Personally, I wouldn't want to own a company where 100% of the ownership was relinquished in an IPO.
Once a company has any of its shares officially available to the public, it is subject to different reporting obligations than most private companies. Once the company has shares available to the public, the whole company is public, even if 100% of the shares aren't explicitly offered to the public at the time of the IPO.
When a company goes public, 100% of the shares are invloved in the process. Now, the company - its owners, will choose how many of those shares they want to sell and how many they wish to retain.
Let's make this simple: If you started The Wiget Co. and 5 years later you took it public. You own 100% of the company and you would decide to sell - in an IPO - say, 49% of those shares. Following this, 100% of the shares have gone public, it just so happens that you own 51% of those shares.
100% of the shares make up the entire ownership of the company. There is not some mysterious portion of the company that is not part of the 100%. If there were, that portion would have no say in the management of the company, as the management of the public company is now determined by its shareholders.
I can't speak if it's universal, but in the case of Dave & Buster's IPO in Oct 2012, they sold 5.88M shares which raised $94M (Wikipedia), well below what the company is acutally worth, even less than 1 years' revenues of $.5B