Social media influencer and founder of Huda Beauty referred to Elon Musk's stock plunge after an unsuccessful attempt to take electric car maker Tesla private
Social media influencer Huda Kattan is "not interested" in an initial public offering (IPO) for her $1 billion cosmetics firm Huda Beauty for fear that the move would make the firm’s stocks too reliant on fast-changing public opinions.
Speaking to Arabian Business, the founder and chairwoman of the Dubai-based company referenced the recent unsuccessful attempt by Tesla co-founder and CEO Elon Musk to privatise the publicly-traded electric car maker.
“We understand how public opinion can change, and I don’t think it fairly depicts the nature of our business,” said Kattan, who has 27 million followers on Instagram and 2.4m on YouTube.
"Elon Musk is realising he can’t go private, but when he wanted to go private, he tweeted something and all of a sudden people started selling their shares. I get that there are other things going on with Tesla right now, but he’s still brilliant."
Musk suggested in a tweet in August he had secured funding from several investors, including Saudi Arabia’s Public Investment Fund, to take Tesla private at $420 a share, despite the parties not having reached an agreement.
Musk’s vocal ambitions stirred unease among shareholders and Saudi officials, subsequently leading to a 30% drop in the firm’s stocks throughout the month. It also led the US Securities and Exchange Commission to investigate the incident for market manipulation and other violations.
Mona Kattan, co-founder and global president at Huda Beauty, also said an IPO would place ‘unnecessary pressure’ on the global cosmetics firm.
“I personally would never want to [go public]… You have to share so much information… And your stocks could [drop] without logic. Sometimes, it could just be emotions and [factors] that won’t materially affect the value of your company in the long run,” she said.
Kattan cited Facebook’s stock plunge in the wake of the Cambridge Analytica scandal, which saw the social media giant expose data of up to 87 million users to the researcher.
“Is Facebook, as a business, dying? No. So to me, going public is unnecessary pressure,” she said.
Founder Huda Kattan added that an IPO is unwarranted as the company’s end goal is to create impact rather than make profit.
“I don’t think I’d be interested in going public. It’s unwarranted. What is the purpose of going public? I don’t see the benefit of it. Is it just to make money? I don’t care about making money. I don’t think it’s necessarily the right way for our business. Our goal is not to make lots of money. Our goal is to create impact,” she said.
Kattan’s company Huda Beauty boasts products ranging from false lashes to skin foundations and eyeshadow palettes. The now-mega influencer initially gained fame on YouTube in 2010 after sharing free make up tips and tricks, swiftly garnering millions of followers due to her maintaining credibility with little to no sponsorships or advertising.