If you want to unlock liquidity in a company, then the wealth of private capital available to Australian companies offers a viable alternative to IPOs, explains Gavin Solomon FAICD, founder and executive director of global trading platform PrimaryMarkets.
An Initial Public Offering (IPO) might not be a golden ticket for long-term shareholders in private companies who want liquidity at any point for personal or marketplace reasons, warns Gavin Solomon FAICD, founder of investment trading platform PrimaryMarkets.
IPOs take time to get broker support and research coverage. Even then, investors may only be after short-term gains and there are no guaranteed gains for the business or its long-term shareholders.
“Yet we still see long-term investors in Australian unlisted companies going to the annual general meeting saying, ‘When are we listing? When can I see liquidity?’ because that’s their exit plan,” observes Solomon.