Market Silence: The Absence of IPO Hype
VentureSource, a part of Dow Jones, Inc., reported that IPO activity is way off this year. There were only six tech IPOs in the first quarter of this year and none to date in the second. That's off from 37 for the same period last year. 21 firms have withdrawn their planned IPOs including a local Chicago favorite, Initiate Systems.
Merger and acquisition activity is also down from 293 deals the first two quarters of last year to 142 this year.
Needless to say, venture capitalists are not happy. Instead of exiting out of their investments (hopefully, at a huge profit), these VCs will likely have to pour in more capital to keep their investments liquid and growing. Firms like NetSuite should be thankful that they completed their IPO last year as the market has turned decidedly bearish since then.
From an analyst view, it's been a really quiet last six months. The hype leading up to an IPO tends to create an overabundance of press, blog chatter and other noise that drowns out the more interesting developments other firms are announcing during the same time frame. Personally, I like the more peaceful time.
Comments