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Special IPO Edition!
I will be on Power Lunch on CNBC at 1:30 pm debating the IPO market with Herb Greenberg, (whose take is here), and whether firms should or should not go public.
My take is pretty straight forward:
1) Why go public? ‘Cause you need the money!
It is the reason for Wall Street’s existence — bringing capital to entrepreneurs, new firms and fresh ideas. In 2010, 154 IPOs were priced raising $38 billion dollars (144%/76% increases respectively).
2) Is it worth it? Often, there are no alternatives. Look at firms that have done well as public companies — like Chipotle or Google or Tesla — they think its worth it
3) Funding New Ideas: When you have an outside Investors or VC fund your firm, they have an eye towards an exit — that means sale or IPO.
4) Who should not be public? Small companies, sub-$250m market cap and less than $100m in sales (I am on the boards of two of them) should not be public. (Its something I have been agitating for internally).
5) SEC Investigations? PUH-leeze. That is not why Twitter hasn’t gone public yet, and anyone who says otherwise is a jackass.
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UPDATE: Video posted here
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