Publicly Traded Companies: Definition and Examples

By Jeremy Bowman – Updated Oct 8, 2024 at 9:54 AM

Key Points

IPOs and SPACs are key routes for a firm to access public trading and capital growth.
Tech giants dominate U.S. public markets, with Apple, Microsoft, and Alphabet leading.
Public companies must comply with SEC regulations, enhancing transparency for investors.

Every share available for purchase in the stock market is issued by a publicly traded company. A company generally becomes publicly traded by making an initial public offering (IPO) of shares in the company, which helps it raise capital. The IPO process gives both investors and the company a powerful way to create wealth.

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An infographic explaining the IPO process a company follows in order to become publicly traded. — Image source: The Motley Fool

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Market Capitalization

Market cap refers to the total value of a publicly traded company's shares.

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One reason companies go public is because doing so creates an opportunity for insiders to sell their equity holdings. A company's initial public offering of shares effectively converts the private equity holdings of business insiders and investors into publicly traded shares, which those insiders and investors can choose to sell on the open market. Companies can also become publicly traded by being acquired by, or merging with, a special purpose acquisition company (SPAC), which is a shell business structure established for the specific purpose of taking a promising company public. But whether the going-public process occurs by IPO or SPAC, the outcome is the same. The company goes from being privately held to publicly traded.

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Regulation Fair Disclosure

This rule is designed to prohibit selective, private disclosure of relevant information by publicly traded companies.

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Source: Yahoo! Finance. Data current as of October 8, 2024.

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Technology companies dominate today's public markets, as the chart above makes clear. Six of the most valuable U.S. companies today are tech companies, and many consider Tesla (TSLA +3.74%), a maker of electric vehicles, to be a tech company as well.

The internet has become the most important force in modern business and has created winner-take-most businesses across much of the tech industry. Apple (AAPL -0.31%) is the dominant maker of devices such as smartphones and tablets, while Microsoft (MSFT -1.45%) maintains a market-leading position in enterprise software. Amazon (AMZN +9.77%) is the clear leader in e-commerce and cloud computing, and Alphabet (GOOG -0.03%)(GOOGL -0.07%) and Facebook (META -2.62%) are the titans of digital advertising. NVIDIA (NVDA -0.04%) has established itself as the leading maker of graphics processing units (GPUs), which are used in everything from artificial intelligence to self-driving cars to gaming. All of these companies still have considerable growth opportunities in front of them, especially for enterprises of such large sizes, and most of them generate attractive profit margins, which are emblematic of the strong competitive advantages they enjoy.

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About the Author

Jeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011. Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Jeremy Bowman has positions in Amazon, Bank of America, and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Bank of America, Berkshire Hathaway, Mastercard, Meta Platforms, Microsoft, Nvidia, Tesla, and Visa. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard, long January 2026 $395 calls on Microsoft, short January 2025 $380 calls on Mastercard, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.