One day last spring, Rick Inatome -- the youthful and by all accounts healthy CEO of Inacomp Computer Centers Inc., a Troy, Mich.-based retailing chain -- rolled out of bed, fetched the morning newspaper, and read with astonishment that his company's stock had plunged almost two points overnight. Since the two points represented around a $10-million difference in market value, Inatome's stomach suddenly felt a little queasy. But after a couple of Oh God, what did I do or say wrong? fits of conscience, he decided there was nothing substantive to this no-confidence vote on the part of his shareholders, and trudged off to work, mildly perplexed.
A couple of days later, he got a call from a stockbroker friend in New York.
"Is it true?" asked the friend, solicitously.
"Is what true?" wondered Inatome.
Pause. "That you're dying of stomach cancer. The word on the Street, Rick, is you're dying of stomach cancer."
Hmmm, thought Inatome -- heartburn, maybe, but not stomach cancer, for chrissakes. He quickly assured the caller that, no, he did not have one foot in the grave, and, by the way, who the hell had Wall Street been talking to, anyway? Shortly thereafter, Inatome stumbled upon the truth: A company with a similar sounding name had put out a release saying that its CEO was terminally ill. There, thanks to a kind of mental typographical error, went public faith in Inacomp's vitality.
Welcome to the wonderful world of IPOs, Rick Inatome.
"You have to develop a completely different mentality to run a public company," admits the 31-year-old co-founder (with his father) of Inacomp, a two-year veteran of the INC. 500's top 50. "You have to fight against getting too low - or riding too high -- over things you can't control. You have to stop feeling victimized, stop internalizing anxiety that really comes from outside sources. People's perceptions affect us, sure, but those aren't that realities of our industry, or our company."
There were other misdiagnoses on the part of investors, too. One stemmed from the early release of revenue reports from two competitors, both showing quarterly earnings down. Inacomp's sales happened to be up over the same period, but that didn't quell the stampede to sell computer retailers' stocks short. Wall Street knows a trend when it smells one, after all, and everyone wants to be on the right side of bad news. Even when there is no bad news.
For Inacomp, fortunately, the rest of the news has been largely upbeat. The company was founded in 1976 with $35,000 borrowed against a family insurance policy: "I was building machines from kits in the basement by night and selling them by day," says Inatome, a Michigan State University graduate in economics who had once learned from an aptitude test that he was well suited for a career in mortuary science. "We did under $400 the first month, but it took off from there and just kept growing." Growing indeed: Inacomp has since branched out to include 40 stores (half company-owned) in five U.S. distribution bases and one Canadian province, with overall 1983 sales of $60 million. The company hopes that 1984's sales will double.
Inacomp's $12.6-million public offering last January was designed to underwrite a strategy of further growth through acquisition and franchising -- a strategy, Inatome adds, that focuses mainly on buying management expertise. He cites the recent purchase of Compushop of Georgia Inc. (now called Inacomp of Georgia Inc.) as a prime example.
"We could have opened up several stores in the Atlanta area to compete," says Inatome, "but here were two brothers running one of the most respected groups of [retail] stores in the nation, and we never could have brought that kind of talent in any other way. We pay more for management talent than we do for stores."
Inacomp has also bought its former marketing consultants' firm and, just before going public, merged with Computer City Inc., of Garden Grove, Calif. Why a public offering? "We had really gotten too big to be a good candidate for venture capital," says Inatome, "and although we considered [adding] bank debt -- it's very hard to finance our kind of growth out of 4% to 5% profit margins -- you have a different feeling waking up every morning knowing you hold personal guarantees on millions of dollars of bank obligations. Those kinds of guarantees can exert a tremendous amount of negative pressure." Growth itself, however, was never a big debating point. Ultimately, Inatome believes, "six or seven national chains will dominate the computer retail market, and we plan to be on top of that group."
Meanwhile, Inacomp continues to mature: It is now a company run by hotshots in their mid-30s instead of hotshots in their mid-20s.
"There are three phases of management in any company," theorizes Inatome, "the entrepreneurial, the transitional, and the professional. I'd say we're in the latter stages of the transitional phase right now."
Inatome also says his own health is just fine, in case anybody on Wall Street wants to know.
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