Why I Think More Companies Will Buy Themselves Back in 2025I noticed that Nordstrom is making headlines today as the Nordstrom family moves to take the company private, effectively "buying it back" from public shareholders. I find this fascinating and may add it to one of my themes for 2025: more small and mid cap companies will leave public markets and go private.
What is Nordstrom's doing? The strategy involves acquiring all outstanding shares not already owned by the family, removing Nordstrom from the public stock exchange. Taking the company private allows the family to regain full control, enabling strategic decisions without the pressure of quarterly earnings reports or shareholder scrutiny. Actually, the exact quote from the company is rather interesting: The Nordstrom family believes it will be more successful without the scrutiny and demands of the public market.
For Nordstrom, going private could mean focusing on long-term investments and restructuring without the constraints of public market expectations, costs or regulations. Ah, the freedom to build! A few things to note about this:
1. Look at the trend of Nordstrom's in the chart above into this go private offer.
2. Nordstrom's will save massively on legal costs and fees associated with going public.
3. I think more companies that are floundering at the small and mid cap level will opt to go in this direction.
4. More CFOs and CEOs will ask if it's worth it to stay public if there is no immediate benefit.
5. What's also interesting is that the companies can always go public again if they think they need to raise money once again or need to tap back into the markets.
This will be a space to watch and I will be writing about this more in 2025.
