A Cheaper Way to Do IPOs

Initial public offerings are an expensive exit route for company owners. Underwriters in the U.S. typically charge 5% to 7% of proceeds. Underpricing of shares takes another 10% to 15%, on average; total costs of $100 million aren’t unusual for large deals. It’s not surprising that many owners pursue other options, especially M&A. In recent […]

by

Howard Jones

and

Rüdiger Stucke

by

Howard Jones

and

Rüdiger Stucke

From the Magazine (November 2013)

Initial public offerings are an expensive exit route for company owners. Underwriters in the U.S. typically charge 5% to 7% of proceeds. Underpricing of shares takes another 10% to 15%, on average; total costs of $100 million aren’t unusual for large deals. It’s not surprising that many owners pursue other options, especially M&A.

A version of this article appeared in the November 2013 issue of Harvard Business Review.

HJ

Howard Jones is a senior research fellow, and Rüdiger Stucke is a research fellow, at Oxford University’s Saïd Business School.
RS

Rüdiger Stucke is a research fellow, at Oxford University’s Saïd Business School.

A Cheaper Way to Do IPOs

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