BOTTOM LINE: If you can get a nice value under the M&A model just do it as IPOs are tricky. Our family office’s companies have seen good and bad results form IPOs. For example, two telecom companies went from $3.50 to $0.01 on NASDAQ and the other from $12.24 to $8.25 on NASDAQ in a day thanks to hedge funds.
Read of the Day: Venture Beat: The numbers say IPOs are more profitable than acquisitions
We’ve seen a move in exit strategy lately from IPOs to acquisitions amid talk that M&A exits take less effort and produce higher returns. But I’ve crunched the numbers, and from what I see, IPOs still create the strongest returns.
IPOs have picked up since 2016 — we’ve seen the likes of Blue Apron, Cloudera, Snap, and Tintri take the leap. But notable exceptions, such as Chewy, Moat, Iron Planet, and Veracode highlight the fact that several private venture-backed companies continue to find acquisitions more attractive. For example, in January, applications management company AppDynamics was finalizing its IPO when it opted, instead, for a $3.7 billion acquisition by tech giant Cisco. .JPG by EY:
.JPG of the day by EY.com
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