Beyond IPOs: The Cyclical Journey from Private to Public and Back Againis my research paper on one of corporate finance's quieter puzzles: firms fight to go public, then a growing number of them turn around and go private again. The paper names this the Private-to-Public-to-Private (P2P2P) cycle and asks what actually drives it, across a sample of 2,585 international firms with a close lens on 422 US-based companies. It is on SSRN as abstract 4610086.
The question
An IPO is treated as an endpoint, the finish line of a company's ambition. But the public-to-private direction is now common enough to demand its own explanation. Take-private transactions, sponsor buyouts, and delistings are not failures at the edge of the market; they are a recurring phase in the life of the firm. Beyond IPOs treats the full oscillation as the object of study rather than the IPO alone.
What the paper finds
- Big IPOs now predict trouble, not stability. Substantial initial capitalisations were historically read as hallmarks of firm stability; in the data they increasingly precede post-IPO valuation challenges.
- The profitability pivot pushes firms back private. A discernible investor shift toward operational profitability, over growth-at-any-cost, often precipitates the strategic decision to re-enter the private realm.
- Macro conditions set the tide.Broader indicators such as the S&P 500 Composite Return act as barometers of how the financial ecosystem sways these transitions, on top of firm-specific factors.
The contribution is to read individual corporate behaviour and macroeconomic currents together, rather than treating going-private as a series of one-off deals. The intent, as the paper puts it, is to inform policy and future frameworks in corporate finance.
Abstract
The oscillation of firms between private and public domains, encapsulated in the Private-to-Public-to-Private (P2P2P) phenomenon, presents a captivating conundrum in global corporate strategies and financial market dynamics. In a comprehensive examination spanning 2585 international firms, with a concentrated lens on 422 US-based entities, this study meticulously explores the myriad motivations behind such transitions. Initial findings divulge that while substantial initial capitalisations have historically been hallmarks of firm stability, they now frequently pave the way for post-IPO valuation challenges. This shift, coupled with a discernible investor pivot towards operational profitability, often precipitates firms' strategic decisions to re-enter the private realm.
Download the full paper on SSRN ↗ or use the DOI: dx.doi.org/10.2139/ssrn.4610086. Indexed on Google Scholar. JEL classification: G32, G34.
Where it sits in my research
Beyond IPOs is the capital-markets-structure companion to The Economics of Wash Trading: both ask how market design and incentives shape the behaviour we observe in prices and volumes. The full set of papers, reports, and explainers is in the research hub.