Beware the unicorn IPO stampede
As unicorns go public, they are added to major large-cap indexes and find their way into portfolios across the income spectrum, exposing these portfolios to risks associated with VC investing
Add BT as a preferred sourceIN MEDIEVAL and Renaissance allegories, unicorns are rare and wild creatures that signify honesty, fidelity, purity, and healing.
In the world of finance, unicorns are backed by venture capital (VC) and are privately funded companies with valuations in excess of US$1 billion that are no longer so rare - and may not always be so pure. And that's something investment advisers need to be especially mindful of. Why? Because unicorns are about to enter the initial public offering (IPO) market and become part of index funds that have a significant presence in retirement portfolios.
Earlier last month (March 2019), the ride-sharing service Lyft kicked off what is expected to be a record year for unicorn IPOs by filing its pre-IPO Form S-1 with the United States (US) Securities and Exchange Commission.
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