IPOs and P/E ratios
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IPOs and P/E ratios
The required P/E ratio for a corporation to go public is recently (temporarily) increased to make it easier for more corporations to go public. However, this resulted in unattractive shares of companies that are economically not strong enough, to be offered on the market and the investment funds which are the primary buyers of such shares, refused to purchase them in some cases.
Recently, corporate market values have undergone a correction and also, profits increased. These two way movements caused P/E ratios to fall and it is time to start correcting the required P/E ratio level needed to an IPO.
We will decrease that value in several steps, following a further decline in the P/E ratios. We expect that IPOs will remain easier than in the past and that the shares offered will be more attractive to the investment funds.
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