Going Public Ain't What It Used To Be

from the no,-not-another-Google-story dept

Ah, yes, the buzz of the IPO is back. However, as this article points out pretty clearly, too many companies believe that going public in 2004 will be just like going public in 1999. However, the times are quite different, and some companies are realizing that, even if the IPO window looks wide open right now, going public is costly, and it may not be the windfall they’re hoping for. At the same time, the article suggests that the increased difficulty in going public will play into the hands of big, established companies who realize that their tiny competitors won’t be able to raise tons of cash on Wall Street. Of course, if you read the details of the article, you realize that the companies that won’t be able to raise so much Wall Street cash are in that position for a reason: they’re not ready to be a public company. They’re usually more of a one product company, rather than a real, sustainable business offering. Basically, the entire article can be summed up by saying “companies that shouldn’t go public will find it more difficult to go public these days.” That seems like a good thing. The only problem is that too many one-product companies don’t realize they shouldn’t be public, and still hope to cash out like it’s 1999. While some of their investors certainly realize that the companies are too young to be public, investors like the idea of cashing out – and are likely to push those companies to go public anyway, which may be troublesome for their long term prospects.

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