Strengths and Weaknesses of IPO
Baderman Island Resort is an independent resort, encircled by Kelsey Island. Baderman Island is an all-inclusive resort that offers practically an unlimited amount of fun as well as family activities anywhere from music and entertainment to winding down after a long day for an enlightening relaxation spa session. The resort exhibits many opportunities for expansion but the resort has to decide upon which option is best expansion plan for their business. One of these options is going public through an IPO (Initial Public Offering) and initiating a SWOT analysis is the most efficient way to investigate this potential expansion plan. The strengths involved in selecting an option through an IPO is that it brings new capital to the table and quickly for such an expansion to make the resort more profitable and also offer even more activities for those visiting the resort. The option also makes the stock for the resort more valuable and attractive for investors as well as potential investors. Expansion of the resort also arouses public interest making it more appealing which will in turn make more money for the resort as well as the investors. The weaknesses apart of developing an expansion plan through an IPO is that with more investors, the profits are divided among more people. Furthermore, with more people there is more red tape when making decisions from within the company as well as more rules and regulations that will cost more to adhere to. Although the organizations profits will increase, it will still be divided amongst the investors and then the company. Additionally, the company must answer to a board of directors to make any alterations or expansions to the resort. There needs to be a vote before any decisions or agreements can be reached to any currently existing or future courtesies and amenities that the resort reserves. Successfully following such strict rules and regulations will drive the companies bottom-line and...
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