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Friday, September 29, 2017

A Fido IPO? No!

News summary by MFWire's editors

Don't get your hopes up for investing in Fidelity [profile] stock any time soon.

Earlier this week Abby Johnson, chairman and CEO of the Boston Behemoth, confirmed on Bloomberg TV's "David Rubenstein Show" that Fidelity doesn't need to raise IPO money. So the world's third-largest mutual fund company and largets 401(k) recordkeeper is staying private.

The Boston Business Journal and Reuters both picked up on the confirmation.

The interview underscores both the differences and the similarities between Abby Johnson and her predecessor, her father Ned Johnson. In dismissing the IPO idea, Abby revealed that bankers often pitched Ned on it and he always said they didn't need the capital. Fidelity does release annual report to its shareholders, but she prefers that to the constraints of quarterly reporting to the wider world. And she keeps her eyes on the long-term, a luxury she and her father can afford as the company's biggest shareholders.

"By the time I came along, all of the investment bankers had given up on making that pitch because they made it to my father so many times and it never went anywhere," Abby says.

Yet Abby is also striking a different path than Ned. Though not a constant media presence like many prominent industry PMs, Abby does do the occasional interview (something her father almost never did), give the occasional speech, and even talk on TV. This personal shift also seems to be translating into a cultural one at the company. And she's pushing the company into new, less traditional product areas. She's even having the company mine Bitcoins!

Meanwhile, anyone wanting a piece of Fidelity had best join the company, rise to the upper ranks, edge out some peers, and buy up their shadow stock when they leave.

Here's the interview. Abby also talks about Fidelity's history (her grandfather founded the company), the need for more women FAs, and more:  

Edited by: Neil Anderson, Managing Editor


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