By Gene Lambey,
Special to the AFRO
Black-owned companies are getting more shine than ever in the business industry. Many Black business owners are innovators, creating their own unique niche in the market. While Black entrepreneurship is on the rise, there are still too few Black-owned businesses “going public.” That is the term used when “a company undertakes its initial public offer or IPO, by selling shares of stock to the public, usually to raise additional capital,” according to the U.S. Securities and Exchange Commission (SEC).
A significant amount of capital is required for Black owned businesses to be publicly traded.
Capital by definition is any type of asset that can be used to create more value, including liquid assets like cash, as well as tangible and intangible assets.
In a data study from November 2022 the U.S. Census Bureau estimated that “140, 918 Black or African-American owned businesses had $141.1 billion in annual receipts with 1.3 million employees, and about $42.2 billion in annual payroll. About 27.5 percent or 38,819 of these businesses were in the health care and social assistance sector.”
In comparison to other minority groups, Black-owned businesses are ranked third in the job market, while Asian-owned businesses are ranked first and Hispanic-owned businesses are ranked second.
Research done by Investopedia shows that Black-owned businesses are “frequently found in industries with lower earning potential, including beauty salons, childcare, home healthcare services, janitorial services and barbershops.”
The Black-owned companies RLJ Lodging Trust, Urban One, Broadway Financial Corp., Carver Bancorp, Axsome Therapeutics and Citizens Bancshares Corporation have gone public and people are able to buy stocks from them.
Robert L. Johnson founded of RJL Trust in 2011. The company has gone public and people can purchase shares of the company under the stock exchange listing, (RLJ). (Photo courtesy of RLJ Lodging Trust)
RLJ Lodging Trust was founded by Robert L. Johnson and Thomas J. Baltimore Jr. in 2000 and went fully public in 2011. The Black-owned real estate investment trust which works with several hotels across the United States. RLJ’s hotels include the Marriott-owned Residence Inn and Courtyard. This also includes Hilton-owned hotels such as Homewood Suites, Embassy Suites, and separate hotels like Wyndham, Hyatt Place and Hilton Garden Inn.
RLJ Lodging Trust has made an estimated $49.7 billion in total assets as of September 2022. According to MarketWatch, buying a share from RLJ Lodging Trust costs as much as $10.05 on the stock market.
Urban One is a Black-owned radio and broadcasting company. The company owns TV One, Radio One, Reach Media, One Digital, One Solution and Cleo TV.
Cathy Hughes is the first African-American woman to lead a publicly traded media company on the U.S. Stock Exchange. Hughes’ company, Urban One, can be found on the stock exchange as (UONE). (Photo courtesy of Facebook)
Urban One, the Black-owned radio and broadcasting company, was founded by Cathy Hughes with the original name Almic Broadcasting. Under Almic Broadcasting, Hughes had only one station, which was in Washington, D.C., called WOL-AM. Hughes has led this company for over 40 years. After selling stocks during the 1990s, Cathy Hughes became the first Black woman to lead and trade stocks with a media company in the stock market.
In June 2023, in an earnings report, Urban One made a profit of $484.6 million from December 2022 to June 2023. The net income was $37.33 million . According to the NASDAQ, buying a share from Urban One costs around $5.49 on the stock market, however it may fluctuate.
Broadway Financial Corp. is the holding company for First City Bank.
Founded by Los Angeles civic leaders H.A. Howard and Dr. H. Claude Hudson in 1946, Broadway Financial Corp made $1.17 billion in total assets as of September 2022. In total revenue, it has made $25.61 million. According to CNBC, buying a share from Broadway Financial Corp costs roughly $0.90 on the stock market, however it may fluctuate.
Brian Argrett was unanimously selected to serve as the president and CEO of Broadway Financial Corps since April 1. The company runs City First Bank, which is listed as (BYFC) on the U.S. Stock Exchange. (Photo courtesy of City First Bank)
Carver Bancorp is a Black-owned bank holding company founded in 1948 by a group of Black community leaders and small business owners in New York. The main mission of Carver Bancorp is to help finance businesses, increase wealth and maintain assets where their consumers thrive. It is the holding company for the Carver Federal Saving Bank.
Micheal T. Pugh is CEO of Carver Bankcorp, founded in New York City by a group of community leaders. The U.S. Stock Exchange lists his business as (CARV). (Photo courtesy of LinkedIn)
Carver Bancorp has made $755.72 million in total assets as of September 2022. In total revenue, it has made $13.10 million. According to CNBC, buying a share from Carver Bancorp costs approximately $2.63 on the stock market, however it may change.
In 2012, Dr. Herriot Tabuteau founded Axsome Therapeutics as a Black-owned biopharmaceutical firm that studies nervous system disorders and diagnoses, including migraines, narcolepsy, fibromyalgia, major depressive disorder (MDD) and Alzhiemer’s disease complications.
Eleven years ago, Dr. Herriot Tabuteau opened a Black-owned biopharmaceutical firm that studies nervous system disorders and diagnoses. The business is listed as (AXSM) on the stock exchange. (Photo courtesy of HerriotTabuteau.org)
As of September 2022, Axsome Therapeutics has made $338.96 million in total assets. According to NASDAQ, buying a share from Axsome Therapeutics costs approximately $81.69 on the stock market, however the price may change.
Citizens Bancshares Corporation is a Black-owned bank holding company. It is the bank holding company for Citizens Trust Bank and Citizens Trust Bank Services. This business continues to operate, providing commercial banking services to individuals, small businesses and corporate partners.
Citizens Bancshares Corporation is one of the oldest Black-owned businesses, operating since 1921, located in Atlanta, Ga. It was founded by a group of Black businessmen known as the “Fervent Five” under the leadership of Heman Perry.
Cynthia Day joined Citizens Trust Bank in 2003 and served as executive vice president before ascending to the position of president and chief executive officer. The bank holding company for Citizens Trust Bank is Citizens Bancshares Corporation, which is on the stock exchange as (CZBS). (Photo courtesy of Citizens Trust Bank)
Citizens Bancshares Corporation has made $164.67 million in total revenue. According to Bloomberg, buying shares from Citizens Bancshares Corporation costs around $37.90 on the stock market, however the price may change.
These successful Black-owned companies are just a sample of the many other Black-owned businesses in the United States. The percentage of Black-owned businesses in the market has dropped slightly over the past three years due to the COVID-19 pandemic, however, they are slowly on the rise due to recent initiatives to promote diversity among business owners.
Black-owned businesses tend to have problems with receiving bank loans to start out their businesses. This is especially true for start-up Black entrepreneurs who are also looking for bank loans to start. Interest rates on business loans, bank branch density, local banking concentration in the residential mortgage market, and the growth of local businesses are markedly different in majority Black neighborhoods according to Brookings.
There are other challenges Black entrepreneurs continue to face such as limited access to startup capital, less connections to investors, and operating in lower revenue industries.
In order for Black-owned businesses to continue thriving, the Black community should work to invest in these businesses. Shopping, sharing and writing reviews, recommending businesses and supporting Black-owned banks are a few of the several ways to invest and support in Black-owned businesses.
