Are you thinking of buying IKEA stock? If you’ve been a college student, you could not have missed IKEA, a popular furniture store. IKEA is a well-known multinational conglomerate that designs and sells ready-to-assemble furniture. Additionally, it also sells kitchen appliances and home accessories, and home services. IKEA was founded in Sweden in 1943 by 17-year-old Ingvar Kamprad, and since 2008, IKEA has been the world’s largest furniture retailer.

What to do if you want to invest in IKEA stock?

Despite its outstanding growth, IKEA remains a private company, which means it is held under private ownership. Private companies may issue stock and have shareholders, but their shares are not traded on public exchanges. If IKEA stock has to be traded on a stock exchange, IKEA should issue its stock through an Initial Public Offering (IPO). If you’re thinking of investing in IKEA stock, you might have to wait some more as IKEA stock is not yet listed on the stock exchange.

Private vs. Public Companies

People usually think if it is a private company, the company would be small and unknown. However, big-name companies such as IKEA and Bloomberg are privately held. Let’s look at what it means to be privately and publicly owned.

What does it mean to be privately held?

It means that the company is owned by its founders, management, or a group of private investors. The main advantage of private companies is that the company management is not obligated to answer to shareholders and doesn’t have to disclose financial information to anyone. The main disadvantage of private companies is that private companies cannot rely on funding from the public capital markets and must rely on private financing. Privately held companies can borrow money from banks or venture capitalists or rely on profits to fund growth, but they cannot tap into the public capital markets.

What does it mean to be publicly held?

On the other hand, a public company means that the company has sold all or a portion of itself to the public through an initial public offering (IPO), which means shareholders can have a part of its assets and profits. The main advantage public companies have is their ability to raise funding by selling stock (equity) or bonds (debt) for expansion or other projects.

Top 3 IKEA Competitors

1. Amazon

Amazon

Amazon is an American multinational technology company based in Seattle, Washington. Amazon’s revenue comes from different streams such as e-commerce, cloud computing, digital streaming, and artificial intelligence. Amazon.com, one of the world’s most valuable brands, was started by Jeff Bezos as an online marketplace for books but expanded to sell electronics, software, video games, furniture, etc. It has disrupted well-established industries through technological innovation and mass scale and has become the world’s largest online marketplace. Amazon distributes furniture through Amazon Home and offers a wide range of furniture in various categories of furniture such as dining room, outdoor, storage furniture, etc.

2. Walmart

Walmart Inc. is an American multinational retail corporation based in Bentonville, Arkansas. It was founded by Sam Walton in 1962 and was incorporated in 1969. Walmart, Inc. engages in the retail and wholesale business, offering an assortment of merchandise and services at everyday low prices. Walmart has emerged as one of the world’s biggest retailers and among the world’s largest corporations. It does not exclusively sell furniture but has a diversified product line. Walmart also has a great selection of furniture in different categories such as bedroom furniture, office furniture, living room furniture, small space furniture, etc.

3. Wayfair

Wayfair, which is headquartered in Boston, Massachusetts, is a fast-growing American e-commerce company. It was founded in 2002 by Niraj Shah and Steve Conine. It was previously referred to as CSN stores until 2011 and Wayfair thereafter. Wayfair deals with home goods and furniture. The company has made a name for itself because of its variety of products, excellent customer service, user-friendly website, and the fact that it offers free shipping, even for some of its larger merchandise.

Final Thoughts

Apart from these three top competitors, there are other companies such as Ashley Furniture, Target, etc., that are competitors to IKEA. However, IKEA is tremendously popular because of its high quality, affordable furniture that appeals to college students, young families, and others on a limited budget. No doubt, if IKEA decides to IPO, the IKEA stock will be a great investment.

Categories: Investing