Industry Analyst & Strategist
Not surprising given that it’s 2020 but I confess I completely missed that The Long-Term Stock Exchange (LTSE) went live on September 9. The press release sub-heading pretty much lays out the mission: “Exchange offers a public-market option for companies and investors who share a long-term vision.” What does this mean for Automattic and when it will go public? This get’s interesting. The original John James Jacoby tweet in the original post is no longer available on Twitter, luckily we have it below, but he states that the actual IPO would happen on LTSE. Now from the press release we get a little more detail about how LTSE can be used: “LTSE can be a secondary listing exchange for companies that maintain a primary listing on another U.S. national securities exchange.”
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.
(February 25, 2020) Ok, not WordPress but Automattic, and yes there is always that great conflation of the two but the question mark still applies. I’m quite surprised that this tweet from John James Jacoby (no relation “Y” vs “I”) did not get significantly more comments and traction.
Automattic will IPO on the LTSE this year. Discuss.@JJJ
It was a very declarative statement and in fact corrected by Matt Mullenweg relatively quickly.
Not this year.@photomatt
If you’ve gotten this far you probably have a couple of questions, probably first what is LTSE? Long Term Stock Exchange is a new SEC approved exchange, there are a tons of details on what this means and there is no better article on the subject than the one published on Marker. LTSE seeks to solve the issues of short term thinking with built in regulation and does have some hot button issues like super voting shares. The other problem is that LTSE is not yet a running exchange, which could be why Matt says not this year, but also because putting together an IPO is a complex and time consuming affair. Given that the Salesforce investment just happened I think there is a lot to sort out and plan. Though I certainly believe an IPO is in the works over the next 12-18 months.
The other big question is why IPO? Investors are always looking for liquidity events and an IPO is generally the best bang for the buck but it also provides cash for expansion and growth. Automattic will certainly be looking for additional acquisitions to bolster and complete solution as well as play in markets and technologies. Of course the other reason is that the 800 lb. gorilla in the room, WP Engine, is also likely to go public in the next 12-18 months. There is certainly a first mover advantage to the initial IPO to take as much oxygen and funding as possible. This is a fascinating and exciting time in the WordPress investment space.
The final question, for Twitter discussion, how would an Automattic IPO change (if at all) the nature of WordPress?