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Topics in Business: Company Research

The first question to ask: Private company or public?

All company research begins with one simple question: Is the company publicly traded or privately held?

  • A publicly traded company sells shares on public stock exchanges. The Dow Jones, the NASDAQ, and the New York Stock Exchange (NYSE) are examples of public stock exchanges in the United States. A share is a unit of ownership in a company. It allows the holder of the share to participate in company profits in the form of dividends, if such are available. Publicly traded companies are required to file documents with the US Securities and Exchange Commission (SEC) detailing their business, their liabilities, their assets, and other information. Because of these filing requirements, it's relatively easy to find information about publicly traded companies.
  • A privately held company is owned entirely by one person or a group of people. Shares of the company are not sold on any public exchange, and there are usually requirements for those who hold shares in privately held companies wishing to sell their shares to sell to other shareholders within the company.

    More importantly, privately held companies are not required to file information with the SEC. Consequently, it can be very difficult to find information on privately held companies. However, if a privately held company is very large, it tends to leave a "footprint" of sorts in the media and in industry reports. For example, Mars, Inc. (makers of 3 Musketeers bars, Dove chocolates, Altoids mints, and other products) has been privately held by the Mars family since its creation, but the company is so big that it leaves an impression in the media and profiles of the candy and confectionery industry. It's worthwhile to note that large private companies like Mars often maintain websites with significant information about the company.