Mark Hulbert: Reports of an overheated IPO market are greatly exaggerated

Recent IPOs do not suggest that investors are irrationally exuberant.

That’s an important lesson to draw, because many companies going public of late , such as Uber Technologies UBER, -0.76% and Lyft LYFT, +1.56% , have raised tens of billions of dollars without ever having turned a profit. This has suggested to some that investors’ faith in these companies’ future growth prospects borders on gullibility.

That is an incorrect assessment, according to Jay Ritter, a finance professor at the University of Florida and one of academia’s leading experts on the IPO market. Ritter instead drew attention to a number several secular trends that have relatively little to do with the message the IPO market may have for the current stock market as a whole, including:

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