Gurley challenges anyone to justify a 57% cost of capital for a legitimate public company.
“Find me any professor, any finance professor. We're a company that's got the possibility of going public, so it's highly legitimate. Should have a 57 cost of capital.”
Gurley challenges anyone to find a finance professor who would justify a 57% cost of capital.
“Find me any professor, any finance professor. We're a company that's got the possibility of going public, so it's highly legitimate.”
Gurley calculates that average IPO underpricing of 50% plus 7% fees equals a 57% cost of capital.
“So last year in 2020, the average IPO was underpriced by 50%. If you add in a 7% fee on the investment bank, that's a 57% cost of capital.”
Gurley calculates 2020 average IPO had 57% cost of capital from 50% underpricing plus 7% bank fee.
“last year in 2020, the average IPO was underpriced by 50%. If you add in a 7% fee on the investment bank, that's a 57% cost of capital.”
Gurley cites data showing IPO underpricing plus fees creates a 33% cost of capital for going public.
“Jay Ritter rerun the data. Is there up 25, 26% underpricing? You add in the 7% fee and you're like a 33% cost of capital.”
Gurley cites research showing IPO underpricing plus fees creates 33% cost of capital.
“I had my friend Jay Ritter rerun the data. Is there up 25, 26% underpricing? You add in the 7% fee and you're like a 33% cost of capital.”