Investors in initial public offerings are taking a fresh look at companies coming to market and asking a new question: Can they make it through a tough stretch?
Concerns about the economy and jitters in credit markets are prompting skepticism about issuers that aren’t very profitable or are carrying heavy debt loads.
“It’s very reasonable for investors in this environment to ask what magic will make a loss-making company more profitable when it’s larger,” said Rett Wallace, chief executive of Triton Research LLC, which analyzes pre-IPO companies.
