Making Waves: Companies Moving Out of the Public Eye

A company filing for an IPO usually makes headlines and not always for a good reason. Taking a company public is a huge venture and there are multiple pitfalls along the way. Companies may receive a lower valuation than expected, which could lessen finical incentive to go public in the first place. Even when a company successfully launches an IPO, there is the issue of added public scrutiny. Public quarterly and yearly finical reports mean that a company’s successes and failures are laid bare. This can make things like restructuring difficult as a business must conduct their efforts in the public eye. We have seen fewer IPOs this year than in 2023. There have also been companies that want to move out of the public eye and are seeking or have completed private equity sales. Will we see this trend continue in 2025 or are we ready for the next wave of IPOs?

We know that inflation has caused some serious problems for consumers and businesses. Sales are higher to come by and many companies have struggled this year. No company wants people to know how bad things might be behind the scenes. It can affect your ability to secure funding, alter public perception, and make it harder to attract investors. Recently, there have been reports that Walgreens is considering a private equity sale. Nothing official has happened yet and experts say that it likely won’t, though the very prospect that the company is exploring the idea speaks volumes. The chain is currently saddled with debt, and they likely need to restructure. This is a difficult process to perform while being publicly traded and the nature of private equity makes sense for the moment. Walgreens is not alone in this thinking; the idea that such a major company is considering this move shows how dire the situation can become.

This year we have also seen a lack of companies seeking IPOs. The restaurant industry has been quiet in this regard. Only a handful of restaurants have decided to go public this year and there are looming questions over what 2025 will bring. Just a few years ago, an IPO was an appealing decision, and it felt like every major private restaurant was rushing to the front of the line. Some of those IPOs during that small boom did not work out and companies have pulled back. 2024 was a difficult year for restaurants and the last thing they want to do is go public when still getting their house in order. There is also the changing political climate that could make companies more hesitant to go public, at least in the first part of next year.

As strange as it is to see so many companies preferring to stay private or actively seeking private equity, it is likely just the phase we are in. The right company going public at the right moment will spur others into action as they chase the shifting trend. We will likely see more IPOs in 2025 than 2024, it would be hard for there to be less. We may continue to see large public companies seeking out private equity, yet the complicated nature of that endeavor means that we will not see many of those transactions over the next twelve months. The current state of the economy means that companies are exercising caution and waiting for the right opportunity to make moves. These things ebb and flow and soon enough, returning to the public eye will come back around.