News that popular messaging network Reddit is set to go public soon begs the question, what are some other private companies that would generate investor interest if they became publicly traded?
In this segment of Backstage Pass, recorded on Dec. 17, Fool.com contributors Toby Bordelon, Jason Hall, and Rachel Warren discuss one such company plus an interesting IPO idea from a member.
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Toby Bordelon: I would consider Reddit. My concern is, I worry its going to be just a ridiculous valuation out of the gate because all the Redditors are going to be buying shares, I don't know. I don't think I'm a day one buyer, I might let things settle out a little bit, but I think it's a fascinating company, it's an interesting company.
Definitely a large, diverse, and loyal user base. It's interesting. For the company that I would buy who went public, this was a no-brainer for me. Lego Group, all the way, man. I have for years, wanted that company to be public. No luck. I don't know if they ever will. I feel like the way they can get into the public markets is some other public company buys them. I think, that's probably what it means.
Jason Hall: It's another one of those Scandinavian giants that's absolutely dominant.
Toby Bordelon: Yeah. It's a weird structure and the family controls it.
Jason Hall: Yeah. Sound familiar?
Rachel Warren: Poor thing.
Toby Bordelon: Yeah.
Jason Hall: Yeah, just like IKEA.
Toby Bordelon: But I don't know where they stand now. A couple of years ago, one year surpassed, Mattel, I believe, as the number one toy manufacturer on the planet. They're ridiculously popular. We probably have them in our homes. If you have kids, you probably have them in your homes. If you had kids, you pretended to buy the Legos for them.
Jason Hall: That's a lot.
Toby Bordelon: [laughs] Good stuff there. We got one. Dylan throws In-N-Out Burger as a potential, that would be interesting. That's one I don't necessarily expect to go public, but you can see it as part of an acquisition.
Jason Hall: Maybe. It's very Chick-fil-A-ish, right?
Toby Bordelon: Yeah, it is. I think Chick-fil-A/In-N-Out would make a great combined company definitely, they don't necessarily much overlap.
Jason Hall: If I could buy Chick-fil-A waffle fries at In-N-Out, that'd make me happy because In-N-Out's french fries are the worst.
Toby Bordelon: You're going to get some emails on that, Jason.
Jason Hall: That's fine. Add me, come at me, bro. [laughs] Even when I order them well done.
Rachel Warren: So you don't like the burger, fries?
Jason Hall: Yeah. Their burgers, they're fine.
Rachel Warren: Oh, ok.
Toby Bordelon: [laughs] Jason's at it today.
Jason Hall: I lived in Southern California for 15 years almost. There was an In-N-Out a mile from the house. The economics of those stores have to be incredible because they are always busy, they're always busy.
The burgers are better than McDonald's. How's that? Does that redeem me at all?
Toby Bordelon: Yeah, I'd go with that. That's true.
