High-profile IPO flops last year may have scared some leaders at private companies from taking the leap. In a newly released interview, taped last month, Fanatics Executive Chairman Michael Rubin said he isn’t one of them.
“It doesn't make me wary at all,” says Rubin, who last May projected $2.9 billion revenue in 2019 for Fanatics. “Ultimately, we have a responsibility to our investors to get them a good outcome, and going public is probably the most likely longer term plan.”
“Here's what the markets are really saying: They used to value only growth, and now they want growth and profits,” Rubin says. “And we're about growth and profits.”
Uber (UBER) and Lyft (LYFT), rideshare companies with massive brand recognition and deep pockets, went public with much fanfare last spring. But neither one had turned a profit — Lyft had lost $911.3 million in 2018 while Uber had lost $1.8 billion that year.
Lyft, which went public on March 29 at $87 per share, plummeted to a low of about $38 in October and has since risen modestly to its current price of $45. Uber hasn’t fared much better, having gone public on May 10 at $42 per share and dropped to a current value of about $34.
While Rubin said he feels an obligation to reward investors who’ve put a total of $1.7 billion into the company, he’s not in a hurry to deliver that payoff.
“There's so much for us to do, and it's so great to be a private company to be able to think longer term,” Rubin says. “There's no rush from our sense to get public.”
Rubin oversees the ecommerce site Rue La La, the delivery service ShopRunner, and Fanatics. He is also a partner with the Philadelphia 76ers and the co-chair of REFORM Alliance, an advocacy group fighting for criminal justice reform.
He has started and led businesses since age 10, when he ran a small snow shoveling operation. By 18, he owned five ski shops.
Rubin made the comments during a conversation that aired in an episode of Yahoo Finance’s “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.
ShopRunner, which provides unlimited two-day shipping for its members at about 150 stores, is not currently profitable, Rubin acknowledged.
“ShopRunner is still in heavy investment mode,” he says. “When I say heavy investment mode, the company was making money a couple of years ago.”
“Then we said, hey, we want to not even double down, but triple down on engineering and product development,” he adds. “It looks more like kind of some of the public companies you were talking about today that maybe people have become a little bit less enamored with because they want profits, which we don't have today, but I think we're making the right investments to be a great public company long term for ShopRunner as well.”
“It's a younger consumer brand, but it's one that's getting a lot of traction,” he says.
Max Zahn is a reporter for Yahoo Finance. Find him on twitter @MaxZahn_.