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Should FUNimation Be On NASDAQ?

by Justin Sevakis,

CastMember1991 asks:

Now with Funimation launching a streaming service that serves as the anime industry's answer to Netflix, I think it's time for Funimation (or its parent company G1200 Media) to file for an initial public offering. I think it would be really cool to see them traded on the NASDAQ using this symbol: (NASDAQ:FUNI). Would that work, or is this a failure waiting to happen?

Much as I would like to say that no business has ever become publicly traded just because the people that run those companies think it would be really cool, that is sadly not true. Wall Street is littered with the corpses of companies built on hubris and dreams, who made life-or-death decisions about their long term financial viability based on how cool it made them look. I used to work for one: it was called ImaginAsian. They lasted 3 years and flushed around $30 million down the toilet.

Being publicly traded, or having an IPO (Initial Public Offering) for a company basically means that company has sold a portion of itself (by means of stock) to the general public. When that happens, the shareholders that end up buying that stock have a (small) claim to part of that company's assets and profits. Selling those shares can raise a LOT of money, and also raise the company's profile in the financial world.

But with that money come a lot of shackles and a LOT of new rules. A public company has to file quarterly earnings reports with the U.S. Security and Exchange Commission. Those filings have to be made public, making it plainly obvious to everyone just how much money you brought in, how much profit you made, and what your best and worst areas of business were in every fiscal quarter. Back when FUNimation was owned by Navarre Corporation (which was a public company before they merged and then bought out), we knew a lot more about their internal business dealings and their finances than we do now.

If I ran an anime company I would never, ever take myself public if I could help it. It seems like it'd be asking for trouble. If I had an IPO, this opens me up to anyone with enough money to buy up a bunch of my stock and then proceed to make trouble at shareholder meetings and conference calls. You can imagine how this might go with otaku. I'd also have to publicly own up to any failed new ventures, address questions that might make licensors nervous, and all sorts of other nightmarish scenarios that I lack the imagination to dream up. Fans know what they like, but many generally don't have any idea what it takes to run a successful media publisher. All it takes is one fan absolutely convinced that you need to make a very, very bad business decision getting a big money player to go along with them, and then your hand is pretty much forced.

Since they are not public we really don't know how big a company Funimation (or Group 1200) is at this point. We don't REALLY know what's selling or what isn't, if their streaming platform is successful or not. And from a business standpoint, it makes much, much more sense to keep all that info under wraps. This is, after all, a very competitive business. And as much of an emotional stake as the fans might have in the various anime publishers, their influence should remain something companies can either choose to heed or not, rather than being forced. Anyone who's ever read a 2000-word forum post on how some company absolutely must spend at least $20 million dollars launching Akazukin Cha Cha in America can tell you how this might go.

I think I prefer things how they are, thank you very much.

Got questions for me? Send them in! The e-mail address, as always, is answerman (at!) animenewsnetwork.com.

Justin Sevakis is the founder of Anime News Network, and owner of the video production company MediaOCD. You can follow him on Twitter at @worldofcrap.

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