RE: Why public?10 Nov 2021 09:25
Thanks for your insights. The normal reason for being a public company is that it offers access to capital. But if the stock is at 4 times earnings, i.e. an earnings yield of 25%, even ignoring the effect of taxes (which makes equity more expensive than debt as tax-deductible if you have any debt) this is a staggeringly high price to pay for access to capital. And they clearly don't need it as they have 750m USD in cash and are generating hundreds of millions more each year. My point is: why bother with capital markets that place such a low value on your earnings, when you can take yourself private, earn the price back in only four years and then own the whole enterprise for free? A rhetorical question, perhaps.