Being publicly held isn’t bad, its just different

Be very cautious when considering taking a private company public, Peter Cherry advised at a GSB Club Leadership Series meeting January 11.

You're going into an entirely different world, and you just don’t get it until you've been there, the CEO of the Cherry Corporation told a small audience assembled in the Bank One Building’s Mid-Day Club. It’s not a bad world, it’s just a different world.

Cherry said he dodged a bullet, by taking the company his father founded in 1952, and took public in 1978, back to private in 2000just in time before the passage of the extremely burdensome Sarbanes-Oxley legislation.

He conceded that going public has merits, including liquidity benefits and new currency for acquisitions or employee compensation. A board of directors can add discipline and rigor to the work, Cherry said. There’s a lot of benefit to be had by having these steely-eyed, critical people outside asking tough questions.

Yet Cherry said he doesn’t miss the general unpleasantness of dealing with the financial community. This is really a crowd that is in the ‘what have you done for me lately?' category. The notion that if they don’t like it, they can sell the stock doesn’t fit into their equation.

Whether a firm is public or private, one thing doesn’t change, Cherry said. Neither of them do anything to get you out all of the challenges, the fun, the problems and the opportunities of running your business.

The Cherry Corp. is a manufacturer of automotive components, switch products, and computer input devices with revenues exceeding $300 million annually. It has operations in the United States, Germany, Mexico, the Czech Republic, Ukraine and China.

 

Jenn Q. Goddu