(Spoiler alert, cool?) There was a lot of business time on Sunday’s Mad Men. Luckily, Dealbook wrote a post explaining what it would’ve meant for Sterling Cooper Draper Pryce to go public in 1968. First, the money: “The banker proposes selling 400,000 shares to the public at $9 a share. Given Sterling Cooper’s existing 1.5 million outstanding shares, that would have valued the agency at $17.1 million — or about $114.4 million in today’s dollars.” The $11-a-share evaluation they received later in the episode would’ve “valued the agency at $20.9 million, or $139.8 million today.” Not too shabby.
But was it out of the ordinary for a smallish agency to go public? Kind of, but not really. Twenty-one agencies went public from 1962 to 1973, corresponding with the sixties stock market boom. Dealbook adds: “Services companies like ad agencies became hot commodities, playing off the allure of Madison Avenue and its mad admen.” Though mostly bigger agencies like Ogilvy opted for this, there were some smaller firms that made the move, to increase cash flow. Specifically, it wasn’t uncommon for small firms to decide to go public after losing a major client, as a way to counter the temporary lack of revenue.
Not like it ended up mattering, since SCDP (or at least Don and Roger) decided to go the merger route. Though we don’t know how the two companies will mesh in the coming episodes, history shows that maybe Don made the right move. Dealbook explains, the nice stock market boom soon bubbled and burst: “Of the 21 agencies that had held I.P.O.’s, two failed and six had gone private by 1978.”