In recent times, a peculiar trend has emerged, VFX studios have gone public making their debut on the stock market. While this may seem like a bold step, it’s a little strange after all these years of VFX studios going public.
So why are Companies entering the Stock Market?
Business expansion
One of the main reasons VFX studios are going public is to secure a massive infusion of capital. Going public through an IPO allows these studios to raise substantial funds from public investors, as well as loans that can be used for studio expansion, adding infrastructure, and take on even bigger and more exciting projects.
Corporate Expenses
overhead costs, such as rent, utilities, and office supplies; clearing debts or outstanding loans that help your business function; They can venture into new markets,investing in cutting-edge technology and software.
Brand Visibility/Popularity
Being publicly traded can enhance a studio’s brand visibility and reputation to non-VFX people. If you see a company’s name on YouTube frequently, analyze its stock and growth potential.
So what’s in it for VFX artists?
Vfx artists can gain an inside view of the operating costs of a vfx studio by reading documents like RHP,Red Herring Prospectus, and other information and earning calls on their company websites since everything is transparent.
It’ll be a good opportunity to see the actual profit and loss numbers behind a VFX studio.
Publicly traded studios can also attract and retain talent by offering stock options and equity grants.
Negative consequences
While it may promise access to capital and growth opportunities, it also carries the risk of compromising the very essence of what makes the VFX industry special.
Creative Sacrifice for Shareholder Value
Publicly traded companies are under immense pressure to deliver consistent profits and meet shareholder expectations. This pressure can lead to decisions driven by short-term financial gain rather than a commitment to artistic excellence.
Talent exploitation and burnout
The pressure on publicly traded studios to maximize profits may lead to cost-cutting measures, which often translate to underpaid and overworked artists.
Risk of takeovers
Publicly traded studios are more susceptible to takeovers by larger corporations, potentially diluting their unique creative identity and focus.
Fluid situation
If there is a large disruption like a pandemic or strike, mass resignations of employees can disrupt the company’s growth, which leads to a drop in stock value.
VFX studios going public should not be taken lightly. While it may promise access to capital and growth opportunities, it also carries the risk of compromising the very essence of what makes the VFX industry special.
Visual Effects and Stock Market
