Liz Demers IPOs: Evaluating failure risk
“Firms are going public now that are riskier than they used to be in the past. They are exhibiting lower levels of profitability and often negative profitability when they go public and that was much less common in past decades. Much of their value resides in future growth prospects rather than past realisations of success, so the characteristics of the firms that are going to public markets and the willingness of shareholders in the public markets to fund those types of firms have really changed over the decades,” Demers says.
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