“Whenever you find yourself on the side of the majority, it is time to reform (or pause and reflect).” ― Mark Twain
It’s been awhile so we are doing another edition of Blogger Wisdom this week on Abnormal Returns. As we have done in previous years we have asked an esteemed group of finance bloggers a series of (hopefully) provocative questions. Blogger answers are unedited and the author’s name, blog name and Twitter handles follow. We hope you enjoy these posts as much as we do putting them together. You can read yesterday’s blogger wisdom post on unmet ETF needs.
Question: What company that is currently private would you most like to see go public? This could be for investment purposes, entertainment value or sheer curiosity. (Answers in no particular order.)
I’d love to see a U.S. sports franchise go public – preferably MLB or NFL. I’d be most curious to see the impact on competitive balance. Other items of interest in this scenario would be proxy votes, shareholder meetings, stadium financing, and impact attracting free agents.
Mars, Koch Industries, Brown Brothers, Harriman and ZeroHedge.
I would like to see Uber go public out of sheer curiosity of where VCs and other investors have the position valued vs. the value of the company after an IPO.
Wright Manufacturing. They make the best commercial lawn mowers in the world. I own 2% of it.
The Trump Organization. They’re going to need to do a capital raise by the time Stormy Daniels is finished with them and I’d like to see their financials beforehand.
In-N-Out Burger because the battles between bulls / bears on twitter would be incredible when it opens trading at a 100x P/E.
Graeter’s Ice Cream, which is based in my hometown of Cincinnati. This year, Graeter’s turns 150 years old and is still owned and managed by the Graeter family. Having been a part of the city for generations, they’re ingrained in the local culture and, even in recessionary periods, are a place for families to enjoy a small treat. Graeter’s served “super-premium” ice cream way before that became a thing and for most of its history was a well-kept secret in Cincinnati and among ice cream aficionados. After Oprah put Graeter’s on her “favorite things” list a few years ago, they’ve seen a surge in demand and Graeter’s Ice Cream can now be found nationally in grocery stores. Given the company’s pricing power and dominance in the Cincinnati market, I would be happy to buy some shares for my children and hold them indefinitely.
I’d like to see ZeroHedge go public, purely for the entertainment value of their pre-IPO road show and investor conference calls each quarter. A more serious answer would be IKEA. I think they have a really interesting business model, especially as the trend of millennials have started moving out of their parent’s house and acquiring furniture and goods of their own as well as the int’l markets that are seeing growing consumer bases.
I dunno, but I own plenty of public companies that I would happily see go private (at a 50% premium, please).
Uber – for entertainment value, to see how the market would price it, and to get further visibility into the details and sustainability of the business model.
Not sure I have a specific company in mind, but I would like to see narrower ETFs. Consider the ETF Industry Exposure & Financial ETF (TETF). It includes companies that issue funds (not a lot of pure plays), companies up and down the chain of the entire ETF ecosystem including the exchanges they trade on, many of which are publicly traded. Just as one example I have always wondered why no one has tried to launch an ETF comprised solely of the publicly traded exchanges, looking globally there would be enough to populate a fund and the niche generally seems to do very well far more often than not. There are many other narrow spaces that I think fit that description.
I’ll approach this from the perspective of someone who would like to invest in the company, so I’ll have to go with Mars, Inc. The company is well-run, owns a lot of great brands, and I think would be a very enticing investment if public.
The Spoetzl Brewery. As much Shiner Bock beer as I’ve flushed down Texas barroom urinals over the past 20 years, I ought to be an owner of the company.
I think if Uber went pubic the market wouldn’t tolerate its losses like private investors do. So it’d have to adjust its pricing and economics, which would likely raise prices, which would push the ride hailing market to a more natural and sustainable path.
In-N-Out. Is my Southern California pride showing?
Rather than name a specific private company as a hoped-for IPO, I’d like to see an environment that would fuel a general return of smaller, innovative companies to our public markets. Many articles have been written on this subject. Rather than rehash their arguments, I’ll offer up one recent piece on the slow death of IPOs and how regulation should change to allow more private companies to go public in U.S. markets.
ContiGroup (formerly known as Continental Grain) for investment purposes.
The obvious answers are Uber and Airbnb. And don’t get me wrong, I would love to see both of those companies go public just to see how the market would react to them. But if I had to pick one “unicorn” to go public, I would choose Coinbase.
For the average investor, it could provide an interesting – albeit indirect – way to bet on the growth of cryptocurrencies given the lack of diversified 40-Act fund options in the space and some of the challenges that come with owning them directly.
Thanks to everyone for their time and effort. Stay tuned for a new Blogger Wisdom question tomorrow.