I Heart IPOs

We are in the heart of the good season of IPOs, and it is looking a bit more promising than it started. Two weeks ago a retirement plan management service, Financial Engines, priced above its range and shot up 44%. This improves on a prior financial-services play, QuinStreet, which priced below its range and sits only 10% above the issue price six weeks later. 

Last week a telecom technology firm, Calix, priced at the top of the range, went up about 15% on the first day, and has settled back 5% above issue price. A fabless chip company, MaxLinear, priced above the range and shot up 33%. 

This week five more are expected to go out, including Meru Networks, an enterprise wireless LAN provider, and another financial-services play, SS&C Technologies. A lot of these IPOs were started in the '90s (and some like SS&C in the '80s), but Meru was started more recently, in 2002, and MaxLinear in 2003. For the VC industry, it is heartening to see 2000-era core technology firms get out. (SS&C is of more interest to private equity firms, which took it private in 2005 and are now taking it public again.) 

The IPO market is still tentative. Only four of the seven expected issues got out last week. Some of the laggards, like Redgate, are trying to roll forward and price day-to-day. It is selling bus advertising space in China, so it casts a bit of a damper on the China-is-a-field-of-dreams story. 

Looking forward to the heart of Silicon Valley VC dreams, Nexsan, a data storage play, is expected to go out in early April. After that ReachLocal hopes to get out. Reach is a the leader in local online advertising, and will be a great indicator of the robustness of appetite for Internet ad-based IPOs. (Disclosure - I have an indirect VC interest on both of these.) 

Comments

[nspolar]

Yelnick, one index that has been in the red all day is the BKX. Hm.

The financials started the mess, may they as well end it?

Question to you since you operate in financial circles. Is there trouble brewing in Europe? The debt problems have been a bit pooh poohed, yet to me they seem to be spreading. And the ole dollah would not strengthen like it has without some fundamental basis.

By the way the BKX imo is an Ellioticians challenge.

ns

[?]

nspolar,

C has the second largest market capitalization in the BKX and it is down over 3% on the news that BHO and Company will sell its stake sometime this year. This is probably the main reason for the weakness in the BKX.

[yelnick]

nspolar, yes, Europe is a ship of state looking for an iceberg. the drop in the Euro reflects this. also the European banks are in much deeper doo doo than US banks. how fast this shipwreck unfolds is unclear. many thought the resetting of optionARMs would sink many Euro banks, but the WSJ reports this morning that even though 3 out of 4 optionARMs are underwater (more debt than value in house), the banks are not foreclosing but trying to work something out.

[joe]

Stupid Yelnick, I have a higher probablity trade, yelnick website has topped out, and downtrend has started.