Four reasons for a company to go public
LivingSocial CEO Tim O’Shaughnessy is pouring cold water on rumours that the daily deals firm is planning to go public, saying the firm has no immediate reasons to IPO. He says LivingSocial, which was tipped to go public shortly after Groupon last year, is being cautious after a string of poor post-IPO performances from over-hyped tech firms in the past 12 months. LivingSocial is also unlikely to consider an IPO with doubts growing over the long term viability of the daily deals model, with Groupon’s rocky financial results casting long shadows over the market.
O’Shaughnessy argues that there are only four reasons for a company to go public: “They want a branding event, they need access to capital, they need liquidity or they need currency that’s marked to lots of M&A transactions,” says O’Shaughnessy. “If any of those four things are ever very prohibitive to us, then it’s something that we would look at doing.”
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