Cowering On A Launch Pad Near You
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A number of Internet companies have IPOs scheduled for this week, but the huge drop in the Nasdaq on Monday and through most of Tuesday has left the launch pad crowded, yet eerily quiet. By early Wednesday afternoon morning, none of the Internet firms slated to go public had even priced shares for trading.
This sudden burst of inactivity stalls a record pace for Internet offerings. After a typically slow January, there were 27 Internet IPOs in February and March each. Now we may be into mid-April before a new Internet ticker hits the Nasdaq.
The reason is that underwriters and the large institutional investors who get blocs of shares at the offer price (or lower) have become addicted to the instant profits an Internet IPO moonshot can bring. This year alone, 28 of the 59 Net IPOs have at least doubled in price in their first day of trading, while 11 of those at least tripled in their debut. I'd want to keep that kind of action going too.
However, things had cooled off considerably for Internet offerings even before this week's market freefall. In the latter half of March, only two of 13 new Net stocks -- from Websense (WBSN) and ArrowPoint Communications (ARPT) -- soared in their initial session of trading, while four others flopped, finishing below the offer price.
The bargain hunters, of course.
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