Can Venture Thaw the IPO Ice Age?

By Swanson, Bret | The American Spectator, May 2001 | Go to article overview

Can Venture Thaw the IPO Ice Age?


Swanson, Bret, The American Spectator


Government policy makers can add first-quarter initial public offering totals to their list of embarrassments. Federal Reserve deflation, the highest tax burden since World War II, and de facto nationalization of broadband access have slowed the economy and crashed markets.They have also shut the window on companies looking for public capital infusions.

LIFT OFF

In March, three key optical networking firms, two innovative semiconductor companies, and numerous software and biotech ventures withdrew their Securities and Exchange Commission S-1 filings. For the year, 79 IPOs have been withdrawn. Include December withdrawals by companies looking to go public in early 2001 and that number swells to 110. Only the March spin-off of Lucent's microelectronics group, Agere Systems (AGRa), could spare the quarter total humiliation. At $3.6 billion, it was the fourth largest IPO ever in dollar terms, but the offering was far from a success. Agere originally hoped to raise $6.5 billion for its operations, which include semiconductors, optical components, and tunable lasers.

Excluding Agere (pronounced "a gear"), 16 first-quarter IPOs raised just $4.5 billion. That's the worst showing since 1989 with just 12 first quarter offerings. And we know what happened to the economy in 1990. Since 1980, an average of 74 first-quarter IPOs have raised an average of $6.1 billion, unadjusted for inflation. Forgone proceeds from abandoned offerings total well over $10 billion this year.

From Optical Micro Machines, a maker of silicon micro-mirrors used in optical switching, to WaveSplitter, a young leader in wavelength division multiplexing, and from International Microcircuits, an upstart competitor to Texas Instruments, to Conexant's network chip spin-off, important companies are being turned away from the public markets. Even last month's feature company, Chorum Technologies, had to withdraw.

At the Optical Fiber Communications conference in Anaheim, Chorum's Mike Decelle told me that SEC rules discourage companies from leaving IPO filings in play until the market bounces back. Companies must periodically update those filings. And as telecom spending slows with the economy, it's likely that last quarter's revenues, which must be reported, are less than stellar. Few companies enjoy issuing new figures implying much lower valuations, so they go back "underground." The rules also prohibit companies on file from raising private capital while they wait to go public. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Can Venture Thaw the IPO Ice Age?
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.