If you are looking to buy some stock in a Black-owned company you won’t find any in Chicago because they are all privately owned, according to Jason Tyler, a senior vice president at Ariel Investments LLC, a Black-owned investment firm. “The a
If you are looking to buy some stock in a Black-owned company you won’t find any in Chicago because they are all privately owned, according to Jason Tyler, a senior vice president at Ariel Investments LLC, a Black-owned investment firm.
“The allure of being a public company is overrated,” Tyler said. “The longer you can remain private, the better.”
Several Black-owned companies are headquartered in Chicago. They include Johnson Publishing Co., Seaway Bank and Trust Co., Parker House Sausage Co. Inc., R.J. Dale Advertising and Public Relations Inc., Reggio’s Pizza Inc., Capri Capital Partners LLC, Luster Products Inc., Baldwin Richardson Foods Co., East Lake Management and Development Corp., and Harpo Inc.
While all of these companies have been in business for over 10 years, none are publicly traded.
A public company is one that issues securities through an initial public offering that is then traded on at least one stock exchange or over-thecounter market.
One reason most Black companies are not public is because of cost, said some Black corporate CEOs.
“There’s a lot of money involved in taking a company public and that would put a financial strain on many Black businesses,” said Robert Dale, president and CEO of R.J. Dale Advertising. “Most Black businesses were started by entrepreneurs and entrepreneurs have a different way of seeing things because they are risk takers.”
John Clark Jr., founder and CEO of Reggio’s Pizza agrees.
“Usually when companies go public, they are trying to generate a lot of revenue,” he said. “But to make more money, you have to spend money, and in this case, it is more than what most Black companies in Chicago are worth.”
Both Dale and Clark said they have no plans to take their privately held companies public but would entertain the right offer.
“Reggio’s Pizza is not for sale, but it can be bought,” Clark said. “Make me an offer I can’t refuse, and I will consider it.”
Dale said his company posted 2007 net sales of $43 million while Clark pegged his 2007 net sales at $15 million.
Maurice McFolling, CEO of Parker House, said most Black companies are not publicly traded because they are small in size and volume and family-owned.
“Small businesses usually stay small, especially when they are family-owned,” he said. “I’m 80 years old, and I can’t see Parker House going public no time soon. At least not in my lifetime.”
He added that one benefit small, Black companies have over large, public companies, that are usually white-owned, is control.
“I don’t have anyone standing over my shoulder telling me what needs to be done to increase shareholder value,” McFolling said. “Without that kind of pressure, Black CEOs can concentrate on increasing sales and expanding the business.”
Wayne Pierce, an investment consultant in the Chicago office of American Express Financial Advisors, said the last “Black dinosaur” America had was Black Entertainment Television, which is no longer Black-owned.
“When BET was sold to Viacom (a publicly traded entertainment company) for $3 billion in Viacom stock, that’s when Wall Street really started taking notice of Black companies,” he said.
Publicly traded companies are required to file financial statements with the Securities and Exchange Commission each quarter and must also post their quarterly earnings on their Web site, according to SEC rules.
“One thing I like about being a private company is the fact that I can build business relationships without everyone knowing my every move. So I don’t have to let the public know where we bank at or how much we pay our executives.”
Being a private company also makes picking a successor much easier.
“If we were a public company and I wanted to retire so my son could run the business, the board of directors would vote on it,” added Clark. “But when you flat out own it, you can pass the company on to family.”
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