I’ve been listening to Aquired recently (podcast about company origin stories) and when talking about privately owned companies (for instance, the recently Mars Inc. episode) they always do back of napkin estimated earnings because the company is private, which apparantly means they don’t have to disclose earnings.
But in my country, Denmark, every company earning above 50.000 DKK (=7853 USD) has to disclose earnings. I believe this is for price discovery purposes, so that other entrepreneurs can see how much margin companies have and try to compete if they earn too much money, which is an important part of capitalism, right?
How come this is not required in USA, the “home” of capitalism? If I’m not mistaken of course, my apologies if so.
In general the concept is that related buyers have a right to be informed but anyone else in the market. So if you were to buy stake in a private company during that youd have the right to the books during that sale and covering that is fraud.
Kind of like how buisnesses would have no right to know how much equity i have unless it was relevent to any actual agreement.
Not saying i think its right way or better but i dont see total transparency of details not related to a direct sale and the partipants to be necceray for a market to be “free”.