Updated: Another sign of the technology apocalypse--financial porn is back.
Business 2.0 has a breathless story about how technology IPOs are back. Oh wait that's too sedate. It's "Tech IPOs: They're back!"
Get ready for a tidal shift. Judging by the number of companies that have already filed or indicated that they might, 2007 is shaping up to be the biggest year for initial public offerings in the tech world since the end of the dotcom bubble in 2000.
Unfortunately, the story neglects to mention raw numbers (of course that may have blown the story thesis). Bottom line: Technology IPOs are hardly back, but may be bouncing off the pavement a wee bit. A look at IPO pricing data from Renaissance Capital's IPOhome.com tell the tale:
In 1999, 486 companies priced IPOs (bet your britches they were mostly dot-com and tech flameouts).
In 2000, 406 companies priced (again mostly tech).
In 2001, 83 priced.
In 2002, 70 priced.
In 2003, 68 priced.
In 2004, 216 priced.
In 2005, 194 priced.
In 2006, 198 priced (a lot of alternative energy and ethanol plays there).
So far in 2007, 30 priced.
I'm trying to get the technology only IPO stats.
Now riddle me this: Assume 50 percent of the 1999 and 2000 IPO totals were technology related (that's conservative). How many companies have to price to justifiably say tech IPOs are back? Will 50 do? A 100 tech IPOs? Who knows, but I'll give you a hint: You'll need a lot more than the 6 touted by Business 2.0. Bottom line: The highest level of tech IPOs since 2000 isn't really saying a whole lot. It's the equivalent of saying the Nasdaq is back when it still needs to double just to get back to the bubble high.
If your company is profitable and worth buying it'll do well. If not, you're Vonage.
Update: Thomson Financial got back to me with technology only IPOs. In a nutshell, tech IPOs better step on the gas. My hunch is the number of tech IPOs will be lucky to beat the 2004 mark.
|High Technology IPOs: 1998-2007|
|Date||Volume ($mil)||Issues||Volume ($mil)||Issues|
|Source: Thomson Financial|