Why Does Brad Jacobs Like Public Companies?

David Senra reads Brad Jacobs's case for running a public company: being public makes it easier to build something big and lasting.

Being public gives him deep access to capital markets on terms he calls non-onerous. There are no coupons, no covenants, and usually no board seats. In a matter of days or even hours, he and his team can raise hundreds of millions or even billions of dollars. Funding is only one advantage. Every 90 days, the quarterly earnings release works as a public report card. The team shares its perspective on the quarter, and analysts model the decisions in real time and poke holes in the results. Results that repeatedly hit or exceed the mark can earn a higher valuation multiple, so investors want to know what is driving the numbers. Being public is also a free form of marketing. Acquisitions have come to the table because someone saw an earnings report or read a note from a sell-side analyst.

The elevated profile is not all sunshine and roses. It requires thick skin. No matter how well a company performs against outlook, loud doubters tell the world why they think the stock is overvalued. Jacobs is comfortable with that trade-off.