Eclectic Curiosity

Posted on January 29th, 2003, by Steve Hardy in Archives, Uncategorized. No Comments

Here’s a kinda dry economic article from The Economist (go figure) about the growing trend for public companies to “go private”. The case for going private has always seemed like a far more sensible route for companies – especially creative companies – to take. Of course, there is a potential bonanza of funds to be had in public markets (the article claims that the private capital market is not that shabby either) but control and long-term vision are sacrificed to greedy brokers and short-sighted “analysts”.

…whereas the bursting of the bubble is likely to depress demand for IPOs and mergers for years, it has probably made the case for going private stronger than it has been since the 1980s. In the 1990s, capital was available in effect free in the stockmarkets, and it was a foolish firm that did not get some by going public. Now, that capital has dried up. Many firms now trade at such depressed prices that it may be equally foolish to remain public.

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