6 ms·
FTA: > “The IPO market is dying,” he said. “You see companies achieving robust valuations on the private market but being treated poorly when they go public.” (
by jpdoctor 15y ago
FTA:
> “The IPO market is dying,” he said. “You see companies achieving robust valuations on the private market but being treated poorly when they go public.” (We’re looking at you, Groupon and Zynga.)
It seems quaint, but there was a time that a company had to have 6 quarters of serious revenue and 2 quarters of solid profits before they went public.
That was before the dumb money from 401k's entered the picture.
- dman 15y agoI think that is an oversimplification. I dont see the average 401k investor investing in IPO's so I dont see how you arrive at the conclusion that more 401k money equals to more companies going public.
- jpdoctor 15y ago> I dont see the average 401k investor investing in IPO's Nor, for that matter, do you see many investors at all getting pre-IPO shares. Most of the small guys come in after the IPO. The problem is that the 401k's go to funds, who are playing a big game of averages. They buy the S&P +/- some delta. IPOs form the delta for some of the funds. (And all of the money buying the S&P means that valuations in general have gotten quite a bit higher over the timeframe of 401k's, which drives post-IPO valuations, which drives pre-IPO valuations.)