Test Cookie policy: All websites across the EU are now required to ask your permission to place cookies on your machine, and you can refuse to give it.

We have limited Spanish content available. View Spanish content.

Snap Chart

How to Avoid the Curse of IPO Underperformance

Elite outperformers have already prepared for life after IPO.

Snap Chart

How to Avoid the Curse of IPO Underperformance
en

Despite the storied stock successes of technology icons such as Amazon and Google, most initial public offerings (IPOs) have burned investors. New Bain & Company analysis shows that over five years, two-thirds of global IPOs underperformed their established, publicly listed peers, with a median 46 percentage points lower total shareholder return (TSR). The elite companies that manage to outperform their public peers in TSR do three things differently. They view the IPO as a beginning and a means to a longer-term value creation, rather than any kind of end in itself. They understand how post-IPO investors have fundamentally different objectives and incentives. And they emphasize strategic support to help build that long-term value, rather than simply seeking transactional help. Executives who have prepared for life beyond the IPO position their companies to earn investors’ trust.

Hubert Shen is a partner with Bain & Company’s Mergers & Acquisitions and Private Equity practices. Henrik Poppe leads the Corporate Finance practice in Europe, the Middle East and Africa. Mike Kuehnel is a partner with Bain’s Financial Services and Corporate Strategy practices. They are based, respectively, in Los Angeles, Oslo and Frankfurt.

Related Brief

Reversing the Winner’s Curse of the IPO

Congratulations, you’ve sold shares to the public. Now what?

Tags

Want to continue the conversation

We help global leaders with their organization's most critical issues and opportunities. Together, we create enduring change and results