Larson recommends that firms take Great Lakes' approach, operating as public companies in terms of compliance and reporting for as long as two years before going public. It's just a good way to run a business. And until businesses are comfortable operating this way, it's too soon to go public. For one, you must wait until the firm is the right size. In addition, he said, companies should demonstrate historic growth that justifies predictions for the future, with growth expectations of about 15 percent to 20 percent earnings per share.
People get enamored of the notion of being a public company.
Many companies may rush into the market, but Mansueto, for one, has assumed a cautious approach to taking Morningstar public and is considering all the angles before taking the plunge. Markets are efficient, and there's no long-term advantage in trying to pump up a company's share price by creating high expectations. Herzberg has not seriously considered taking his company public. It's not conducive to running on a very short-term outlook. The nature of our business is that's very tough to project our earnings on a quarterly basis because a lot of our income is transactionally based.