BEVERLY HILLS, California — Will investing in the Uber initial public offering make you a billionaire?
Probably not, says Jason Greenberg, the head of global technology mergers and acquisitions at Jefferies.
While it's hard to predict which of the multibillion-dollar tech IPOs this year will thrive, one thing is for sure, according to Greenberg: Investors buying in to today's mega public offerings won't see anywhere near the same returns that investors saw from tech investments in the 1990s.
"Uber, at $90 billion or $100 billion — I don't have to know anything to know you won't make 15 to 20x your money. It's almost impossible," Greenberg said Tuesday at the Milken Institute Global Conference.
Greenberg made those comments during a panel of global dealmakers gathered in Beverly Hills on Tuesday to discuss mergers and acquisitions.
Uber, which is on its road show pitching investors, is expected to go public next week in the biggest IPO of the year. With its lofty valuations garnered through private funding rounds, Uber is the poster child for companies staying private longer.
While the wave of tech IPOs has captured the public's attention, Greenberg said that even he didn't know which ones would do well.
"We took Amazon public in 1997 when I was with Deutsche Bank," Greenberg said. "It was losing a handful of millions of dollars on $20-somewhat-million in revenue. And people thought, who's going to buy a loss-making online book company? I wish I was smart enough to realize what it would become. I wasn't."
"We also saw Pets.com go public in 1999, which flew into the wall," he added. "Webvan flew into a wall. I could make the argument of which ones I like or don't. We'll see a lot of these [current IPO-ready] companies be very successful companies 10 or 15 years from now. Which ones, we could argue."
But even those dot-com-era investments won't compare to the returns seen by investors who made big bets on Cisco during its 1990 IPO, he said.
"One of my colleagues who did it made 100 or 1,000x his money over eight years by putting money in at the IPO of Cisco," Greenberg said. "That doesn't exist anymore."
Most of the value, he said, now goes to those who invested in the private market.
