I’ve always found the realm of finance to be a complex cluster of fluctuating stocks and investments and nothing much else. However, after our in-class exploration of tech IPOs, I thought back to Mahesh’s discussion on risk and uncertainty in operations, and I quickly realized: the crux of finance itself is the embodiment of volatility.

Specifically, this interesting article describes BCA Marketplace, a UK-based car auctioneer firm, that decided to withdraw their floatation decision, citing the reason “volatile global equities”. From a corporate growth standpoint, I acknowledge that the sheer amount of capital raised through public shares cannot be overlooked, as BCA’s opportunity cost by backing out was at least £200m. However, it’s easy to get caught up in the numbers and not delve into the real implications of an IPO. Logically, I feel that the dilution of ownership from shared equity could lead to internal culture clashes and the future risk of voting in a board of directors that are unrepresentative of the company vision, while the new obligation to produce financial statements for external stakeholders would also be an added managerial hassle.

To me, the financial game is now just as much about betting all of your chips to maximize your returns as it is about knowing when to safely fold until the next round.