It is very different to be a subsidiary of a public company than to be public yourself. Take Waymo vs Alphabet. If you are the public company, you need to have your unit economics working such that you generate short term profits.
You can lose money in a subsidiary so long as it is small by comparison to your overall P&L (Waymo losses of a few billion over several years vs Google annual revenue is over $160B and profit over $34B).
If on the other hand, Waymo were its own public company (and not a subsidiary), then it would need to show results on its own.
Don't get me wrong: being a subsidiary of a public company is still worse than say being a private company with a massive warchest or being the subsidiary of a private company with strong cashflow / cash reserves.
I'm not sure that's the case. The markets aren't very keen on missing profit goals, but are very understanding of intentionally not being profitable while you use revenue to invest hard in the business. For instance Amazon has famously not had a focus on yearly profits and regularly has negative profit. The markets are more than accepting of this because they continue to grow and it's information that the market had ahead of time rather than being an excuse for missed goals.
The markets more want you to be honest in your 10-k and S-1 than strictly require short term profits.
You can lose money in a subsidiary so long as it is small by comparison to your overall P&L (Waymo losses of a few billion over several years vs Google annual revenue is over $160B and profit over $34B).
If on the other hand, Waymo were its own public company (and not a subsidiary), then it would need to show results on its own.
Don't get me wrong: being a subsidiary of a public company is still worse than say being a private company with a massive warchest or being the subsidiary of a private company with strong cashflow / cash reserves.