Public firms feeling heat of stock market decline.There are few upsides upsides Adverb Informal, chiefly Brit (foll. by with)equal or level with, as through revenge to being a publicly traded firm right now. The deluge Deluge (dĕl`y  j), in the Bible, the overwhelming flood that covered the earth and destroyed every living thing except the family of Noah and the creatures in his ark. of corporate scandals--which have undermined shareholder
faith--hardly helps matters.
On the other hand, privately held firms must be breathing a sigh of relief that they decided against going public back in the late 1990s. The dynamic also holds true in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. real estate, where two leading brokerages exemplify both ends of the spectrum. "Most public sector real estate firms remain trapped. A lot of this is due to the high amount of debt they are running," said Bruce Mosler, president of U.S operations for Cushman & Wakefield. An added benefit to being private, in Mosler's view, is that Cushman & Wakefield can "focus on the business" rather than the past two quarters. On the public side of the industry, Insignia Financial Group -- Insignia/ ESG's parent company--was trading at $8.2 a share last Wednesday. The stock has hovered below $10 a share for the past two months. A spokeswoman for Insignia would not comment on how the publicly traded firm would characterize its status as it pertains to the market right now. One Manhattan-based REIT--Newcastle Investment Corporation--withdrew its $101 million initial public offering last week. Bear Stearns The Bear Stearns Companies, Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., one of the largest global investment banks and securities trading and brokerage firms in the world. and Lehman Brothers Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, is a diversified, global financial services firm. It is a participant in investment banking, equity and fixed income sales, research and trading, investment management, private equity, and private banking. were hired to underwite the IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. . The firm, which buys credit sensitive assets, filed for the IPO on the NYSE NYSE See: New York Stock Exchange last December. "It's commonly said that the chief executive officers of public sector firms spend around 100 days of the year looking backwards rather than forwards," said Michael Van Biema, a professor in the Finance Department at Columbia Business School Columbia Business School (part of Columbia University), officially named the Columbia University Graduate School of Business, and also known as CBS, was established in 1916 to provide business training and professional preparation for undergraduate and graduate . "The real issue is that these firms are under such scrutiny, while the privately held firms aren't," he added. Over the past few years, public sector real estate firms have entered a period of massive consolidation. Some--like GB Richard Ellis--have decided to go private. Others have trimmed their staffs and overhead in the hopes of being bought by someone else. Grubb & Ellis has been in numerous failed merger talks with other firms recently, but so far there have been no takers. This trend is likely to continue, in Mosler's opinion. "I believe that over the next 24 months, the five global real estate providers will be reduced to 3. I also believe that more companies will go private," said Mosler. The principal of residential brokerage Belmarc--an owner operated firm and one of the last remaining independents--was suspicious of the IPO trend of the late 1990s. "I never really viewed it as a viable option for our firm. What's the benefit at the end of the day?" said Neil Binder. He added that most of the public firms that merged with other firms did so due to a "recessionary environment." |
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