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Why Investors Should Say No to Tech IPOs
Investors didn’t have to wait until the later stages to beat public market shareholders. According to the report, the average annualized return for Series A investors was 63 percent, while those investing in Series B to Series D have also earned at least 50 percent annualized. From Series D and later, the upward trend in returns becomes more pronounced. On IPO day, the mean return for investors in rounds E-H and rounds A-D was 98 percent and 66 percent, respectively, according to Manhattan Venture.
WHY IS EVERYONE CANCELLING NETFLIX AND SWITCHING TO OTHER PLATFORMS?
Talking about the change, Santosh Rao, Manhattan Venture Partners head of research, told Yahoo Finance: “Netflix was all about subscribers for so long. The whole story has to be evaluated from a lower base now. And the multiples are getting compelling at this point, but we need to see that the growth story is still intact and they have a strategy to tackle the challenges ahead.”
With the Pullback in IPOs, Shareholders in Private Companies Are Selling — And Prices Are Dropping
That’s because the investible universe in the private market has never been so big and so cheap. According to PitchBook, the number of private companies valued at more than $1 billion reached 340 in 2021, more than the past five years combined. And they’re now trading at a 20 percent discount compared to the last quarter of 2021, according to the latest monthly report from Forge Global, a private market trading platform.
Netflix Q1 net subscribers unexpectedly decline, revenue misses expectations
Meanwhile, private valuations have shrunk. Stakes in pre-IPO venture-backed companies, whose last financing round was in last year’s second half, dropped an average of 60% from their previous level, by the estimate of Manhattan Venture Partners. That might involve simply blowing off some excess. “Capital markets had been running too hot,” Rodde comments.
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