Goldman Sachs analyzed 4,481 IPOs over 25 years and concluded that these 5 attributes can make or break a newly public company
- The public markets have seen a long-awaited influx of initial public offerings this year.
- While many IPOs are outperforming the market, some of the most high-profile new listings such as Uber and Lyft have struggled.
- Goldman Sachs analyzed 4,481 IPOs over 25 years and determined the five attributes that are a key to a successful IPO.
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2019 has been a monster year for initial public offerings.Renaissance IPO ETF, which tracks the performance of new listings, has climbed more than 33% since the beginning of the year. Comparatively, the S&P 500 has risen about 19%.
But some of the most closely followed public offerings are struggling. Uber and Lyft have both dipped below their offering prices. Investors have begun to question the rising costs of their business models, and whether or not they can ever achieve sustainable profitability.
The same questions are being asked about upcoming public offerings from Peloton and WeWork. Many of the venture-backed startups that are approaching the public markets are pursuing new, unproven business models. That can make it difficult for investors to predict the success of a particular IPO.
Goldman Sachs analyzed more than 4,400 IPOs over 25 years and determined the most important attributes that can determine the success of recent public offering.
Here are the five key factors the firm says can make or break an IPO: