The IPO Market is Sending Contradictory Signals
Despite the Sino-American standoff shutting down the pipeline of Chinese firms listing in the United States, the initial public offering (IPO) continues to gush with promise. Management, if it is to be true to its fiduciary responsibilities to its existing shareholders, seeks to go public at the most opportune moment, in other words, when it believes it can get the best possible price for its shares. Secondly, IPOs are proxies for the enthusiasm that entrepreneurs have for the opportunities in the economy. These two things are contradictory: after all, the best price to list is when the market...