ARA

The kind of business model that ARA employ is actually a very attractive one - asset light, little capex and very scalable. The only thing is that you've got to pay to grow and retain the human capital that you use in this business. When the business is private and profits are shared between internal shareholders, there are every incentive to keep costs in check and generate good returns / cash flow at the company level. And in the years when the company is preparing for IPO, especially so, even to the extent of holding their own salaries back to generate good earnings history for the company.

You could argue that this is true for every company, but in a business where the only ingredient is the people, and the people owns most of the place (and have already cashed out big time), will they have any incentive to continue to generate durable shareholder value in their organisation? Not to say that they won't, but somehow I cannot yet see the track record to be comfortable with this co.

For people invested at the beginning (i.e. the founders and the starting employees etc), the returns on their investments are huge, possibly in the order of 100/200x initial capital (and what capex is there at the beginnings except the office rental, computers, some cash for working capital such as payroll and expenses etc?). For people coming during or after the IPO, you have to ask yourself what are you getting, in terms of tangible benefits of the ownership of ARA. Like what is the present value of their management contracts that they have for the REITS they are currently running?