Transcript of Advantages and Disadvantages of Athletic Endorsements. Due to scandals or their use of performance enhancing drugs; companies have the right to drop their endorsees or simply not renew their contracts. Will lose about $1 million dollars from his sponsors. Athletes endorse over 40% more products then celebrities.
Even with the benefits of an IPO, public companies often face several disadvantages that may make them think twice about going public. One of the most important changes is the need for added disclosure for investors. In addition, public companies are regulated by the Securities Exchange Act of 1934 in regard to periodic financial reporting, which may be difficult for newer public companies. They must also meet other rules and regulations that are monitored by the Securities and Exchange Commission (SEC). In order to become an IPO, a company must be able to pay for the generation of financial reporting documents, audit fees, investor relation departments, and accounting oversight committees. IPOs often generate publicity by making their products known to a wider potential swath of customers, but taking a company public is a huge risk.
Smaller businesses may find it difficult to afford the time and money it takes to become an IPO. Privately held companies have more autonomy than public ones.Special Considerations. One of the highest profile IPOs of 2017 was Snap Inc , best known for its flagship product Snapchat.
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Despite an initial surge, the stock was unable to gain much traction with investors during its first year as a public company. In November of 2018, Reuters reported that 'Snap reported that it had received federal subpoenas related to a class action stemming from its IPO. The lawsuit claims investors were misled about Snapshot's user growth ahead of the company going public.' In early 2019, Snap Inc.' S stock continued to go down.