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More smaller firms may look to go private

With the downside of being a public company becoming abundantly clear — as ceo's and balance sheets increasingly come under the microscope of Wall Street, the government and anxious, angry investors — expect a stampede of small to mid-size public companies as they rush to go private, said nationwide outplacement firm Challenger, Gray & Christmas.

"Can you hear?" asked John Challenger, ceo. "The shuffling, panicky sound just before a stampede."

There is, thinks Challenger, "about to be a huge stampede by the hundreds of small and medium-size companies that went public in the 1990s and now are desperate to go private. Many of these small-cap companies were enthralled by the large amount of public capital once available. They created the aggressive growth strategies that investors were ravenously looking for in the 1990s. Now these companies are exploring every possibility to get out from under the all-seeing public eye."

Especially under the microscope, said Challenger, are chief executives, many of them doubtless looking for an exit strategy. Many are "now undoubtedly focusing on how to extricate themselves from their current situations, with their reputations unbesmirched and their portfolios intact. How much envy many currently employed ceo's must feel for compatriots who decided to 'go out to pasture.' "

Challenger added, "What ceo who participated in the boom years wants to be around now? [They] are persona non grata."

In the wake of accounting scandals, said Challenger, expect tomorrow's ceo's to resemble C.P.A.'s more than charismatic visionaries. "We are in an era where financial and legal executives will ascend to the top job — financial executives who can act as internal auditors and legal executives who can defend the company."

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