Goldman Tells IPO Investors It's Sales, Not Profit, That Matters
- Investor interest in near-term profitability may be misplaced
- Revenue growth seen as more consistent pointer to performance
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Goldman Sachs Group Inc. has some advice for potential investors, who are increasingly having to consider billion-dollar share sales by loss-making companies: focus on sales growth rather than near-term profitability.
High-profile initial public offerings by companies such as Uber Technologies Inc. and Lyft Inc. this year struggled to attract investors at first due to skepticism about their ability to generate profit. The latest entrant to this cohort is WeWork, which hasn’t turned a profit since its founding about nine years ago.