Corporate partner Jim Kearney authored an article for the Portland Business Journal titled “Stoel Rives’ Jim Kearney on whether it’s time for IPOs to RIP,” published June 24, 2019 (subscription required). In the article, Kearney looks at the upsides and downsides for a company in going public and whether an Initial Public Offering (IPO) is still worth considering.
The national trend in IPOs has been a decrease in their numbers – 2018 saw fewer than half the number in the dot-com bubble year of 1999 – with a decline over roughly the same period of publicly traded companies from about 7,000 to about 3,600. Portland has experienced a similar decline in the popularity of IPOs.
Kearney outlines upsides to IPOs – easy access to capital after the IPO is completed, liquidity (ease of selling shares), and an aura of credibility and stability that may create additional publicity to draw customers and suppliers.
The downsides of IPOs may make a straight sale of a company or raising growth capital from private investors more appealing, in particular if a primary goal is liquidity for shareholders.
Kearney concludes: “So are IPOs still a viable option for companies looking to grow? The short answer is yes. But because going public is time-consuming and expensive, private money is often a better alternative.”