Being Private – A Competitive Advantage

Now that Hertz is going private, I can't help but wonder if public companies in some industries are at a disadvantage. Sure, Hertz was sold because Ford needed the money, but obviously the buyers think they can do a good job with Hertz.

SEC filings are intended to provide information to investors, for their own protection. But accounting statements have become so complex that it's tough to decipher how cash really moves through a company sometimes. (I often have to make Mrs. Businesspundit explain accounting footnotes to me.) Has the cost of compliance and the incessant focus of Wall Street on quarterly earnings made it attractive to go private? Will that become a competitive advantage for some industries? Could the SEC step into the 21st century with the rest of us and encourage transparency in a way that doesn't have such high compliance costs? Or do they still think 70 year old rules are as applicable today as they ever were?

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