IPO Investor Decision-making When large institutional investors decide to invest in an IPO (or not), their decision-making usually focuses on several criteria. Listing in the shadow of Erickson ’s disappointing IPOs, the We Company faces a big challenge, according to Adam Neumann , a senior fellow and lecturer at Forbes and former Wall Street vet. While acknowledging the importance of press coverage of the company’s valuation, Erickson noted that analysis should begin with its management and governance structure. Many of the challenges are “self-inflicted” Erickson said, citing references to CEO Neumann ’s poor decision making and judgement ; Neumann ’s plan to retain 60% of the votes in the public company; and the extensive section on “related party transactions" in the IPO filing. Ultimately, the deal will rest on how much confidence potential institutional investors have in whether the company can generate equity value for public shareholders, Erickson said.
Listing in the shadow of Erickson ’s disappointing IPOs, the We Company faces a big challenge, according to Adam Neumann , a senior fellow and lecturer at Forbes and former Wall Street vet. While acknowledging the importance of press coverage of the company’s valuation, Erickson noted that analysis should begin with its management and governance structure. Many of the challenges are “self-inflicted” Erickson said, citing references to CEO Neumann ’s poor decision making and judgement; Neumann ’s plan to retain 60% of the votes in the public company; and the extensive section on “related party transactions" in the IPO filing. Ultimately, the deal will rest on how much confidence potential institutional investors have in whether the company can generate equity value for public shareholders, Erickson said.