US IPO: Value recognition? Not really! Trading liquidity? Yes!

We previously looked at M&A of VC funded private and listed companies in the EU and US (https://bit.ly/3EU4n8H). Listing EU companies in the US is perceived as more attractive or beneficial – but is it reflected in the numbers? 

Recently, we decided to take a closer look at the difference between listing a company in the US (US2US, N=275), in the EU (EU2EU N=38) and listing an EU company in the US (EU2US, N=25). 

As a surrogate for value creation/recognition post listing, we used the highest share price in the period 6 months post the IPO up to 5 years after, divided by the share price at the IPO (peak multiple). We evaluated the liquidity as the monthly trading per company and the average between companies and you can see the results in the table below.

In our view, the value creation/recognition is surprisingly similar across EU/US whereas the liquidity is remarkably different – and in our view this justifies considering a US listing when possible!

The notable difference in “raised to date” possibly highlights the maturity needed for an EU company to do a US listing. 

What do you think?

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