Only once before in at least the last thirty years have public equity markets been so patient with money-losing enterprises. In 2018, more then four out of every five initial public offerings (IPOs) had negative earnings in the 12 months prior to the offering. The last time the percentage was that high was in 2000, the peak of the Dot-Com bubble.
Looking ahead to the rest of 2019, several high profile private "Unicorns" have alluded to going public. The five largest are Uber, Airbnb, Lyft, Pinterest and Slack. This handful of companies will try – with the help of duly-motivated bankers – to convince investors they are collectively worth more than $180 billion (Airbnb has suggested they may skirt the bankers and sell shares directly to the public). While the amount of equity listed and publicly available for purchase will be far less than the $180 billion combined valuation (Uber may raise no more than $12 billion), these IPOs will represent a significant amount of new supply of public stock that will need to absorbed.
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