YOU ASK:
What is the definition of Demutualization?
WE ANSWER:
Demutualization is the process that coverts a mutual company into a shareholder owned company.
A mutually owned company is owned and controlled by a small number of investors. When the company has grown to a sufficient size such that it wants to expand, the company can decide to issue shares of stock.
To start the demutualization, the company can make an IPO or an initial public offering. Here, stocks are offered through the stock market. People can buy shares of the stock and this gives them the right to become the company's part owners.
Demutualization can take years or can be finished in a short period of time.
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