Technology and Health & Life Sciences
Brexit: What It Could Mean for High Growth Companies
On June 23, 2016, 52 percent of the United Kingdom voted to exit the European Union. This process will not happen immediately and could take at least two years to complete. So, what will this mean to U.S. companies and how will it impact high growth companies?
In working with innovative, high growth companies in the technology, health and industrial industries, Cherry Bekaert found that most executives believe there will be some type of impact on their business, but that impact will be minimal. Currency risks seem to be the top concern as this decision could hurt the British pound and affect U.S. exports. While these executives believe Brexit will not jeopardize their businesses directly, they do believe it will have a negative impact on the global economy as the financial markets are already starting to feel the impact.
Stock market volatility was cited as a primary concern among executives and its impact on the U.S. economy. According to The Washington Post the day after the vote, “Wall Street was slammed from the moment trading opened, with the Dow Jones industrial average dropping more than 500 points within minutes. Though it pared those losses over the morning, it dropped again by afternoon and had lost 609 points at close, down 3.4 percent. The broader Standard & Poor’s 500-stock index closed down 3.6 percent, and the tech-heavy NASDAQ composite index suffered a 200-point loss, closing down more than 4 percent.”
As the consequences of this vote are revealed in the coming months, it will become clearer what this change might mean to high growth, innovative companies. We will continue to track the effects of this decision and what implications it will have on U.S. companies.