Ironically enough, it was Friday the 13th that the Nasdaq decided to have a
huge rally. But in order to make the IPO market a happy place again, the
Nasdaq will need a few weeks of stabilization. Actually, this looks
possible. The markets appear to be greatly oversold.
There were 16 IPOs planned for last week, with estimated proceeds of about
$6 billion. Of this, only five were able to hit the markets successfully.
Total amount raised? A mere $386 million.
And, for the most part, the successful deals were non-tech. Examples
include POZEN (a drug developer), Watson Wyatt (the fourth largest human
resources consulting firm), W-H Energy (an oil drilling equipment maker) and
Introgen Therapeutics (another drug developer).
But there was a high tech company that had the fortitude to launch its IPO:
IPO day was on Thursday, when Nasdaq dropped 93.81 points and the Dow
plunged 379.21 points.
Yet, Synplicity was the week’s best performer. Then again, investment
bankers did engage in some finagling. That is, the IPO was priced at $8 per
share, which was well below the price range of $10-$12. On the first day of
trading, the stock price increased 42.2 percent to $11.38.
The company focuses on the red hot communications equipment sector.
Basically, Synplicity allows for better design of complex integrated circuits.
So is the company a bargain? Perhaps not. True, the company has strong
customers – such as Cisco, Tellabs and Motorola. But, the revenue base does
seem small — $13.9 million for the first six months of 2000 – given the
fact the company has more than 1,300 customers. What’s more, the company is
still sustaining losses ($2.8 million).