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Hbr Case: Give My Regrets to Wall Street?

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Submitted By hh1007
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Should First Rangeway remain public or go private?

Since First Rangeway Consulting went on public, Kenneth, the CEO, has faced various

challenges. The senior management at First Rangeway is considering whether it should remain

public or go private.

We think that First Rangeway should stay public.

 Management transparency: As a publicly traded company, there are many regulatory

requirements that the First Range should follow. It has to disclose more information to

protect investors’ right and improve its internal control system. Transparent corporate

environment would add to its value and build trusts in the market.

 Analyst calls: Although Ken didn’t like to have conference calls with analysts; it helps

the company to set the short term and long term goals. CEO should have a clear picture

of the company when he confront analyst and take questions. He will be able to detect

potential problems and plan better by preparing quarterly calls. In addition, sometimes

analysts provide valuable insights to the company.

 Talented human capitals: First Rangeway was able to hire bright students from top MBA

schools. One of the important reasons for them to choose the company would be the good

reputation and growth potential. If the First Rangeway decide to go private, it would be

hard to maintain the high growth rate. Accordingly, it would be questionable if the

company is still attractive for young associates to stay.

 Greater Profits: It was capital raised from IPO that the First Rangeway could grow so

fast. However, if it has to spend its cash to privatize, it wouldn’t just mean the cash

outflow. It would change the company’s position completely, and there is no guarantee

that the company could remain profitable. Furthermore, the company needs to prepare the

higher cost of capital as it

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