Industry Analyst & Strategist

Where are the WordPress IPOs?

Well, I've been solidly wrong about the two big elephants in the WordPress ecosystem for over two years! Way back in October of 2020 I wrote, WordPress IPO?, with what I thought were solid predictions based on the facts at hand as well as ripe market conditions.

So what I expect is that when Automattic IPOs in 2021 it will be on Nasdaq for liquidity and LTSE as a secondary listing for long-term stability to the employees and WordPress community. Why am I bullish on a 2021 IPO given what a crazy year 2020 has been? I’m expecting a slight run on the market over the next few months because yeah 2020. There will be pent up demand for someone exactly like Automattic. Or WP Engine.

Well that was horribly off. First of all, Long Term Stock Exchange (LTSE) has only two (2!) current listings. Second, to add insult to injury, in December 2022, businesswire, Twilio Announces Voluntary Delisting From Long-Term Stock Exchange, "As part of Twilio’s commitment to non-GAAP operating profitability beginning in 2023, the Company has evaluated discretionary expenses and determined that the costs associated with maintaining a dual listing were no longer justified."

None of this bodes well for my initial speculation coming true in 2023, or ever. In an even more timely piece, Sam Becker at Fast Company, IPOs decline as large companies gobble up more startups. That’s bad for innovation, "Fewer companies are going public, more are being acquired, and that’s likely part of a big-picture strategy by established companies to insulate themselves from would-be competitors." This in retrospect should be super obvious given the huge spate of WordPress ecosystem acquisitions from 2000 - 2022 (though the velocity seems to have decreased).

I also feel that given the community connections via founders, employees, and customers, there may not actually be an appetite in leadership at Automattic and WP Engine to go the IPO route. As the report mentions there are some macroeconomic considerations that will deter IPOs, mainly interest rates. What's the incentive for an IPO at the point? Of course the existing investors who would like exists, but these same investors would be stuck with the interest rate issues that dog that greater market. Who is going to buy into the IPO especially if they have to leverage themselves with expensive financing? Also, who wants the headache of shareholders demanding short term thinking for returns over the long term success of an open source community.

So for 2023, I don't predict the IPOs of 2020.

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