Unicorns and their IPO: Are they Overvalued?

Abstract

Unicorns are companies with a high level technology where their market value is more than 1 billion dollars and are not listed on the Stock Exchange. The study aims to measure the changes in market values of unicorns and identify which variables influence their market values in different moments of time. By comparing the market values, it was verified that unicorns before IPO are undervalued in relation to the subsequent periods. Furthermore, the linear regressions show that the level of undervaluation and sales volume appear to influence positively the unicorns market value, while the level of financial leverage seems to have a negative influence. The capital retention after IPO does not show evidence that it influences the unicorns market value.