Listing on the Spanish
Stock Exchange
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STRUCTURE ORGANISATION AND OPERATION
OF THE SPANISH SECURITIES MARKET
The shares of a listed company have a target market
value, which makes them a highly liquid payment ins-
trument that can be offered in a financial operation, as
loan collateral, donations, dation in payment, inheritan-
ce, benefits in kind, employee bonuses, etc.
Market valuation is a very important reference for
a company’s managers when it comes to taking deci-
sions. But there are other advantages as well. For exam-
ple, companies can reinvest the profits destined for divi-
dends, as investors enjoy a public market where profits
can be realised by selling shares.
Listing also means gaining access to the large in-
vestor community. Companies that decided to go public
have a wide and varied base of investors, who are used
to investing in business projects and assuming risks.
Companies do not have to go out and find investors
one by one; the stock market, to some extent, provides
them. This allows them to widen their shareholder base
and make it more stable.
Access to different types of investors enables a
company to largely design the composition of its share-
holder structure and make it highly stable.
The capacity to control the composition is greatest
when the stock market listing is accompanied by a pu-
blic offering of sale or subscription where the company
can define who it wants as shareholders.
Logically, the daily transactions in the market
change the identity of shareholders and over time even
the distribution of the different types of investor. Seve-
ral instruments allow companies to track this process.
A listed company also entails a more professional
organisation, as it has to be transparent and must pro-
vide information.
Listed companies are managed by professionals
who seek the creation of value; effectively transmitting
this commitment to investors in general and sharehol-
ders in particular. This means that the best decisions
for the medium and long term must be taken without
being conditioned by the stock’s daily trends.
Because of this, greater professionalism is one of
the major challenges facing many companies seeking
to be listed.
Another attraction lies in the policies of employee
incentives involving the possibility of employees being
offered the possibility of becoming shareholders. The
use of company shares as incentives for workers and
other groups is not only a form of payment but also
makes employees more committed to the company’s
success and its plans and development projects. If the
shares are listed, there is an added incentive for emplo-
yees: they can sell them whenever they wish.
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