|I am not inclined to criticize a company for taking advantage of an open window to tap the public markets, even of it means a few bumpy quarters while they get their act in order. If they don't take advantage of the opportunity, they may never get another chance. GRPN timed their IPO perfectly. They needed the cash and the window was open. The cash has given them an opportunity to revamp their business model. Livingsocial was not so lucky. The KING IPO was not a disaster. They raised their cash at a reasonable valuation and now have an opportunity to show the world that they have a Second Act, or not.|
IPO window slamming shut on tech and biotech
By Aaron Pressman
April 12, 2014
So much for the busiest week for IPOs since 2007 … because it looks like Thursday’s market swoon has derailed much of the new issues market.
Seven companies were scheduled to go public after the close yesterday but it looks like only three actually made it: Mediterranean restaurant chain Zoe’s Kitchen ( ZOES), energy infrastructure operator Enable Midstream Partners ( ENBL) and livestock drug maker Phibro Animal Health ( PAHC).
That’s not surprising after the tech-heavy Nasdaq Composite Index plunged 3%, its worst single day decline since November 30, 2011. Recent IPOs and other fast-growing, unprofitable companies were among the hardest hit. Network security specialist FireEye ( FEYE) dropped 12%, streaming music service Pandora ( P) fell 10% and cloud HR provider Workday ( WDAY) lost 9%.
So as for the tech and biotech IPO candidates planning to price last night? Crickets. There is no pricing information for HR cloud services provider Paycom Software, early-stage biotechs Scynexis and Aldeyra Therapeutics or real estate investment trust City Office REIT. The web site IPO Boutique reported Scynexis and City Office would try to price next week.
Underwriters did complete one deal postponed from Wednesday, Farmland Partners ( FPI), but at a reduced size and at the low end of its expected price range.
And none of the four deals priced Thursday night were well-known companies. The real IPO test comes next week, when Weibo — the Twitter of China — and Sabre, owner of the Travelocity website, are planning to raise big bucks.
If the market continues to drop, especially for technology and Internet companies, there’s little chance those deals will price. But if things recover quickly, the IPO window could open right back up.
We’ll update you as more information becomes available.