Some of the most anticipated initial public offerings are for those companies already at the top of their industries but which have remained privately-held for a long time. Some large companies are held privately for more than a single generation. When they announce a public offering, it piques the interest of more investors than…
Organizing business activities within corporations was unnecessary for most of history. When businesses draw on a limited set of talents and resources, they do not become large enough to warrant becoming a true corporation, with fractionalized share ownership and owners who are distinct from management. Without the latter, even limited liability may seem pointless. Prior…
Colonial ventures were partly motivated by profit in the 17th century. Some, like the English colony at Virginia, were established as profit-seeking companies. They raised money by selling shares to investors with various different interests though. To many, the profit motive was of secondary importance. Some supported the Virginia Company, even buying its shares,…
Improvements in transportation and communication came quickly over the 19th century. Alongside railways and telegraphy, steamships were responsible for powering much of the change. Steamships themselves saw regular incremental improvement. Indeed, they were entirely different, in scale and design, at the end of the century than at the start. They were bigger, faster, costlier,…
In America as in many other countries, from the mid-19th century and into the 1870s and 1880s, railroads were absorbing a considerable amount of investor capital. As a result, they were the dominant issuers of new securities. Setting government bonds aside, stock exchanges were essentially markets for railroad shares. However, as what is called…
An initial public offering (IPO) is a milestone achievement for a company, often a relatively new company. But, for Ford Motor Company, it was a belated achievement. The company’s founder was wary of giving up control so an IPO would only happen after his death. Still, the offering had the result of realizing new…
No business is risk free. It is remarkable how even monopolies, whether of a natural sort or those granted by law, are susceptible to challenge. The British East India Company possessed one of the most remarkable monopolies in history and even it struggled to make money for certain long periods in its history. Railroads were…
Over a century ago, railway companies were among the largest issuers of bonds in the market, second only to governments. Indeed, one could say that it was financing railways that really built the modern bond markets. Because many railway issues had very long terms, some a century or longer, a few vestiges of this…
In the early days of any industry, growth requires lots of external capital. Reinvested profits, if there are any profits at all, are usually woefully insufficient to meet the growth expected by visionary founders or eager customers alike. This means the founders and executives of firms in new industries have to be capable financiers, or…
Honest financial journalism is indispensable to ethical financial markets. It is hard to imagine a clean financial industry in operation if the state of its trade press was unchanged from that of the middle of the 19th century, when financial journalism could be summarized as the propagation of rumors, often with nefarious ends. The professionalization…
