In 1988, nearly two years after selling shares to the public in one of Britain's most hotly subscribed initial public offerings, the Virgin Group, the music and entertainment company founded by Richard Branson, was struggling.
A looming recession had begun taking a toll on profits and the 1987 stock market crash had left Virgin shares trading at slightly more than half their offering price. So Branson, frustrated by what he deemed the shortsightedness of the public markets, took the company private again.
He has remained wary of the stock market ever since, shielding most of his businesses from public scrutiny in a web of offshore trusts that serve as holding companies for a US$5 billion empire that includes airlines, bridal gowns, soft drinks and financial services.
"The delightful thing about not being a public company," he said recently, "is that we don't have to worry about foolish analysts who say stupid things."
But despite such obvious disdain for the burdens of running public companies, Branson -- now Sir Richard, having been knighted in March 2000 -- is reversing course. He is planning to take as many as eight Virgin companies public, starting next year with Virgin Blue, an Australian budget airline.
Since investors and analysts have not changed -- if anything, the bursting of the technology bubble and the Enron fiasco have made them more skeptical -- many people are wondering why Branson is coming back to the market.
Given the opacity of his companies' finances, the rush to sell shares to the public has revived rumors of a cash crisis that last appeared when he sold 49 percent of Virgin Atlantic Airways, his single biggest moneymaker, to Singapore Airlines in 1999 for ?600 million (US$875.5 million at current exchange rates).
Branson is again dismissing speculation about his solvency, saying he is courting the stock market only to allow his loyal partners, many of whom are venture capitalists, to cash out of their investments. Since 1999, he has raised ?1.3 billion by selling stakes in companies, including Virgin Atlantic, Virgin Blue, Virgin Radio, Virgin Cinema and Virgin Active, a chain of health clubs.
He bristles at the suggestion that he is in financial trouble and boasts that he has never closed a Virgin company. He also dismisses skeptics who entertain such ideas, particularly financial journalists, as cynics "who are only going to become famous if they can predict the downfall of people."
Outwardly, Branson, 51, still appears the carefree tycoon, an image that he has carefully cultivated by flying in hot air balloons and dressing in drag to promote his businesses.
Worth an estimated ?1 billion, according to a list of wealthy Britons from The Sunday Times of London, Branson has certainly embraced the trappings of a tycoon. He owns an Oxfordshire home that sits on a 450-acre estate, complete with its own cricket field and Indonesian teahouse. He also owns a town house in London and Necker, a resort in the British Virgin Islands.
But a growing number of critics contend that Branson's charm and knack for publicity shelter a financial house of cards. Branson and his deputies, these people say, routinely make aggressive projections that are rarely achieved, creating the impression that his companies are performing better than they are.
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