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April 10, 2006
Investment Bank IPOs
The current spate of investment bank IPOs (JMP is now threatening to jump) is another worthwhile reminder, if needed, that when profit-hungry sorts like this think their shares are worth more in the public market than as a partner's share of profits it's usually a good time to run.
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Point well taken.
To cut it a bit more finely, this is especially the case respective of I-banks, whose partners are in the business of knowing the market for shares. There are a lot of other reasons for IPOs (e.g. diversification of partners' portfolios, the business getting another mechanism of tapping the capital markets), but these were as true last year as this. What's changed? Well, valuations for one!
I note that similar considerations also apply when VCs pressure investee companies to IPO.
well said- I agree 100%