Finance Articles

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Money-losing companies mushroom even as stocks hit new highs

January 10, 2020

Reading Time: < 1 minute “Tesla Inc. shares have doubled in three months, while General Electric Co. shares are up 44%. The pair are the two most valuable loss-making companies, part of a shockingly high proportion of listed companies that have been losing money—despite, or perhaps because of, the long bull market,” writes the Wall Street Journal.  Cordell Eminent Scholar Chair Jay Ritter shares research showing how about three-quarters of IPOs were made by loss-making companies last year in a story from senior WSJ columnist James

Jay Ritter

Mr. IPO

December 10, 2019

Reading Time: < 1 minute Having spent his career tracking the emergence of new public companies, Cordell Eminent Scholar Chair Jay Ritter has earned the moniker “Mr. IPO” from industry professionals and journalists alike. Read more about why Ritter decided to start tracking IPOs, why IPOs are important for the economy and what he thinks is the better investment option for small investors instead of IPOs in this story from UF Explore. 

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When to Buy Into Aramco

December 9, 2019

Reading Time: < 1 minute As Saudi Arabia’s oil giant Aramco is set to go public, investors should consider a number of factors when thinking about buying shares. Cordell Eminent Scholar Chair Jay Ritter comments on when to consider buying into Aramco in this story from The Wall Street Journal. 

Map of San Francisco, California

A year in which the IPO market sobered up

November 26, 2019

Reading Time: < 1 minute “For all the euphoria over the likes of ride-sharing app Uber, the chief feature (apart from the lack of profits) of several of these companies since their listing has been their disappointing performance. Uber shares, for example, have plunged more than 30 per cent since the group’s IPO. Analysts say the poor performance is partly a product of investors having been sucked into the hype surrounding them,” writes the Financial Times.  Cordell Eminent Scholar Chair Jay Ritter comments on how

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Uber Shares Hit Record Low as Post-IPO Lockup Expires

November 15, 2019

Reading Time: < 1 minute “Uber Technologies Inc. shares hit an all-time low Wednesday as the ‘lockup’ period following its May initial public offering ended, delivering a blow to a company that has struggled to satisfy investors,” writes The Wall Street Journal.  Cordell Eminent Scholar Chair Jay Ritter commented on the shares traded after the lockup period ended and more in this story from The Wall Street Journal. 

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“Innovative And Daring” CFO of Spotify Announces Retirement

October 30, 2019

Reading Time: < 1 minute “Spotify announced Monday that its finance chief, Barry McCarthy, 66, would retire in January. McCarthy helped take the music-streaming giant public last year with an unconventional approach that skirted around the traditional IPO process and investment bank middlemen. In a risky move, McCarthy circumvented the traditional initial public offering, its roadshow and underwriters’ fees, and instead executing a direct listing, a process where shareholders sell existing shares directly to the public without the company going through an intermediary. The tactic

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IPOs are a racket. But try finding something better.

October 28, 2019

Reading Time: < 1 minute “As privatisations spread, investment banks such as Goldman used a new technique called book-building to ramp up enthusiasm [for IPOs]. Rather than only tapping retail investors, they allocated blocks of shares to money managers such as Fidelity Investments, increasing the pool of capital available. Since then, the American IPO model has conquered the world,” writes The Economist.  Cordell Eminent Scholar Chair Jay Ritter comments on how the underpricing of IPOs in America has left billions, yes, billions, on the table in

3D rendering of pump jack in an oil field

What investors need to see in Saudi Aramco’s IPO prospectus

October 21, 2019

Reading Time: < 1 minute “Saudi Aramco — the state-run oil giant — is reportedly delaying its initial public offering, which Saudi Arabia has valued as high as $2 trillion,” writes Marketplace. “Despite the delay, the oil giant is planning on issuing a prospectus, giving investors some details about what’s going on under the hood of the world’s biggest energy company. A prospectus is a pretty important part of any initial public offering. But for this particular company, investors are going to be paying extra

Jay Ritter

Lossmaking tech shares face rough ride as lock-up clauses expire

October 15, 2019

Reading Time: < 1 minute With lock-up periods set to expire for companies that went public this year, like Uber, Pinterest and Zoom, these companies may now have to worry about a selling flood on top of already poor-performing IPOs.  Cordell Eminent Scholar Chair Jay Ritter comments on how lock-up periods might affect the valuation of these stocks. See what he had to say in this story from the Financial Times. 

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Startups hear about drawbacks of IPOs at San Francisco meeting

October 7, 2019

Reading Time: < 1 minute As traditional initial public offerings struggle, Cordell Eminent Scholar Chair Jay Ritter spoke at an event hosted by UF alumnus and venture capitalist Bill Gurley (BS ’89) about the benefits of direct listings. The event, titled “Direct Listings: A Simpler and Superior Alternative to the IPO,” highlighted Ritter’s research, which shows the average first-day gain for 88 IPOs priced at $5 or higher so far this year is 24 percent, the highest since 2000.  Read more about the event and Ritter’s