IPO window pain: Some issues falling through - San Francisco Business Times:

martaemimbzini.blogspot.com
If it makes it out of the IPO windosthis year, the semiconductor compangy will be only the third venture-backed tech company in Silicomn Valley to do so and one of just 13 acrose the nation. The third quartere showed improvements in the amount ofmoney venture-backed IT companiezs raised in their initial public offerings. But publicc market investors are still giving IPOs amixedc reaction. Depending on who you ask, the IPO marketf is either in the tank or rosywith health. Taking the latterf view is Dow Jones the San Francisco researchb company that collects data on the venturercapital industry.
The organization points out that the thirdf quarter marked someencouraging milestones: The five venture-backed tech companies that went public raised a median of $95.33 million, the highest median since while in aggregate they pulled in $547.6 million, up 68 percentg from a year ago. The third quarter was also the firsft since the second quarter of 2003 when there were more techthan health-cared IPOs. Jessica Canning, senior researcyh manager at VentureOne, took an upbeat view of the data: The IPO marketf is "the strongest it's been since 2000," she said. "Wer finally turned the corner and the IPO markety is beginning to open up forIT companies.
" She adderd that between 2001 and 2005, only 2004 had more than 11 tech There were 15 in 2004. Sharing a positive outloom is Samuel Wilson, a senior research analyst with ofSan Francisco, who pointedd to some of the successful IPOs in 2006 as a sign that the climatwe for tech companies is healthy. , a San Franciscp company that makes appliances for widearea networks, for priced at the high end of its range at raised $85 million in September and, as of earlu October, boasted a share pricde of more than $19, he noted. It's market capitalization is over $1 billion now.
At the time of its Riverbed was posting losses but hada one-year salews growth rate of 795 "The market is incredibly receptive," Wilson said. "Its [sharw price] shot up 100 percent in less thana Likewise, Oceanport, N.J.-based , a data managemen software company, also priced at the high end of its rangs at $14.50 a share and raised $161 millionj in September, making it the biggesrt IPO of the quarter. Since going public, it traded as high as $19.96t a share. Unlike Riverbed, CommVault is profitable but its one-yearf sales growth rate was slower -- 32.5 percent.
Wilsonj said this year's tech IPOs show that if a companuy isposting losses, it's growty rate better be impressive. Conversely, if it's a slower growth rate probably won'tg hurt its chances. But while therr were a number of solid debuts in there were some poor ones as Of the13 venture-backed IT IPOs in 2006, at least four have been trading below their offer prices -- some by quitee a bit. Among them are Redwood City'ws , an online digital photo services and productscompany that, despite profitability and 54 percenf annual sales growth, dipped as low as $12.32 on Oct. 6, down from an offeriny price of $15.
Others include , a New Jerseyt Internet phone company, down 58 percent since its IPO, and , a Pennsylvaniaz traffic data company whose shares have plummeted 60 percent sinceits IPO. "It' still chilly," said Brenon a financial analyst with the 451 who noted that those with a differing view aretrying "to will the market to come He notes that Sevin Rosen, a venture capitap firm with offices in Palo recently cited a poor exit environmeny as one of the reasons why it was returninyg up to $300 million in commitmentsd for its tenth venture fund.
In a number of tech companies have withdrawn IPOs this he said, while companies like and ushered in two of the biggesrt tech buyouts in historu because they felt undervalued on the publicx markets. "It's tough to be a start-up," Daly "It's going to continue to be a selectivdIPO market."