Office landlord The We Company is getting set to come public, with plans for an initial public offering (IPO) maybe as soon as this month (September 2019). But investors need to step back and take a deep breath. With recent rounds of private funding placing a valuation of as much as $47 billion on the lessor, you need to carefully examine the hype. Here's what you need to know before you jump on We's IPO.
On Wall Street, investors place valuations on stocks every second of the trading day. At any moment, you can look at metrics like market cap and price-to-earnings ratio (among many others) to get a feel for what investors are thinking about a company. When a company is private, you don't actually get a clear indication of what it is worth; you have to infer that from other sources, like the private capital it raises. It's kind of a guessing game.
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