Reprint: R0402B
It’s been only four years since First Rangeway Consulting went public, but to CEO Kenneth Charles, it seems like a lifetime. In the grand old days of its IPO, the company couldn’t grow fast enough to meet customer demand; top talent answered the siren call of its options; and the owners gleefully watched their wealth escalate along with the stock.
Post-bubble, First Rangeway’s stock is down 80% from its peak value, potential hires are wary, and the company feels beleaguered by Sarbanes-Oxley and SEC requirements. In addition, Kenneth worries that pressure to make quarterly results is compromising his relationship with customers. And did we mention that he loathes analyst calls?
That said, First Rangeway’s stock price is on the mend, and there are some extremely tempting opportunities on the horizon that will require a heap of capital. Rangeway’s CFO speculates that these opportunities could mean as much as 30% growth over the next several years.
Should First Rangeway remain public or go private? What are the advantages and disadvantages of each alternative? Four experts weigh in on this fictional case study: Tom Copeland, the former chair of UCLA’s finance department and managing director of corporate finance at Monitor Group; Chan Suh, the cofounder, CEO, and chairman of Agency.com; Ed Nusbaum, the CEO of Grant Thornton; and John J. Mulherin, the president and CEO of the Ziegler Companies.
