Investors should be wary of the new IPOs as they can trigger a “revolving door” effect where the money is poured in before any of the companies have even been sold, said Professor Brian McGowan, a finance lecturer at Dublin City University.
“You’re not going to get the return that you’re hoping for,” he said.
“When you invest in IPOs, it’s a gamble because you’re not sure what the companies are going to do.”
The best advice I can give is to wait until the pre IPO period is over and see how the companies will be structured.
“That way you’ll have more time to buy into them before the IPO.”
The riskiest pre IPO investment, the idea that IPOs are a safe bet, is not only due to the huge returns they promise but also to the limited access to equity in the IPOs.
This is because IPOs only work if the IPO is structured as a structured transaction, in which investors are given a share of the company in exchange for cash.
The fact that the companies don’t have to reveal all of their financial details, as required by Irish securities law, also means investors will not know what kind of investment they are making.
“They’re looking for an IPO where there’s no guarantee the investment will work, but that’s what they’re looking to get,” Professor McGowan said.
Irish investors will also be at a disadvantage if they don’t get a good sense of the quality of the technology, which could mean a lack of liquidity in the markets.
“It’s hard to get an accurate idea of how good the IPO will be without knowing all of the details of the deal,” he added.
The IPO will be the first in the history of Ireland and will give the world a chance to see what is possible.
“There’s a great opportunity for Irish companies and Irish people to be in the game and to really test themselves against other firms,” Professor McGuinness said.
Read more about IPOs: IPOs to go ahead in 2018A second round of pre- IPO investment has been agreed with a consortium of venture capital firms, which include Accel Partners, which owns the Dublin-based software company Jetpack.
The firms, including Accel and Apollo Global Management, are set to invest up to €25m in a new IPO for the company.
The consortium, called the Accel IPO Ireland, will have the option to offer shares in the new company, which is likely to be the largest IPO in Irish history.
The IPO, to be announced in the coming weeks, will involve the acquisition of a 25% stake in the company and the sale of other equity stakes.
It is not yet known what kind and size of stake the Accell IPO Ireland will hold, although the consortium has indicated that the value could be in excess of €50bn.
Read the latest on IPOs and how they can impact Irish companies hereIrish IPOs will be much bigger than the IPos in the United States, where a single venture capital firm owns 50% of the shares.
The Irish IPO will not only have a global reach, but also the potential to drive significant value for the Irish economy.
“In the United Kingdom there’s a very different structure where you’re limited to 50% shares and the rest are owned by private equity firms.
This will be very different in Ireland, because we’ll have a fully independent, fully open-ended IPO,” Professor John O’Neill, head of the business school at the University of Limerick, said.
Irish IPO investment in 2018 is set to surpass $20bn, up from about $15bn in 2019.
“There’s going to be a lot of people out there that are going out there, they’re going to buy IPOs but they’re also going to want to know what the outcome will be,” Professor O’Neil said.
“They’re going a long way to knowing what the prospects are for the IPo.”
The Irish IPO may be the biggest IPO in history, but the IPOS itself is likely not the only thing that will drive investment.
“If IPOs become the new normal in Irish life, it will drive a lot more money to the Irish financial system.
I’m sure there’s going be a huge impact on the local economy and the wider economy,” Professor McNamara said.
The IPOs in the US and other developed countries are largely run by large investment firms, with smaller and mid-sized investors in the mix.
Irish investors have been waiting for the IPO to happen since at least 2015, when the Irish Investment Board, a group of public companies, set out its plan to invest €100bn in the country.
“We need to build an investment base, we need to get to grips with our finances and we need a sustainable system,” Mr O’Connell said.