Tech industry says IPO market has dried up

[Silverbird]

IPO hopefuls in limbo, waiting for market recovery

EE Times [Electronic Engineering Times]
Dylan McGrath
(11/04/2008 6:57 PM EST)
URL: http://www.eetimes.com/showArticle.jhtml?articleID=212000554 SAN FRANCISO—The year was already shaping up to be a dismal one for initial public offerings (IPOs) when the financial crisis hit and decimated stock markets. Now IPO activity has literally ground to a halt, leaving chip companies and others who planned to go public in limbo. IPO activity may not pick up again until well into next year, experts say.

"In the 35 years I've been covering IPOs, I've not seen a slower period in any given year, not only for tech companies but for IPOs in general," said Scott Sweet, senior managing partner for IPO Boutique, a Florida-based investment advisory service that specializes in IPOs.

There has not been a U.S. IPO since August. According to Renaissance Capital's IPOhome.com, 190 companies have current IPO filings with the U.S. Securities and Exchange Commission (SEC). Year-to-date there have been 43 U.S.-listed IPOs and 96 non-U.S. IPOs greater than $100 million in size, down 77 and 69 percent, respectively, from 2007, according to the site, maintained by the Connecticut-based provider of independent research and investment management services. According to a report released Monday (Nov. 3) by the Global Semiconductor Alliance trade group, the third quarter was the third in a row in which no venture-backed semiconductor industry companies went public......

 

[Guest2]

I tawt I thaw a poody tat. I did! I did see a poody tat! :toung:

Wouldn't M&A's pick up well before IPO's. I'm not knowledgable about this
part of the market, but I thought consolidation and the strong gobbling up
the weak would begin to climb before Initial Public Offerings felt comfortable
enough with the Market. Just curious !

 

[Bullitt]

The thing with mergers, IPO's and buyouts is this.... and please keep this in mind with the upcoming IPO of GM. For every buyer there is a seller. The seller will always try to sell at a price they perceive to be 'good'. Never will a buyer have as much information as the seller, no matter how good of analysts you have. Think of buying a home. The ones who have lived there 25 years (sellers) know more than the best army of home inspectors could ever discover. The owners may know the basement sump pump only backs up on rainy days in November, but a home inspection in June will not yield that discovery.

I look at mergers as 1: A boon to the banks who promote the stock then drop it like a hot potato after cashing in their call options and 2: Insiders saying, "We're not going to get a higher price than what we are at right now. In other words, It's like when we sell a stock we almost always try to sell it at what we perceive to be the top.

Blackstone is one of the biggest insiders on wall street. They dumped an IPO at the top. GM insiders have much information at their disposal. I mean, these guys really aren't dumb. They have to get this thing off the ground before the smoke grenade stops spewing gas.

Had two charts to post here but lost them so I won't bother. Anyway, take a look at the 1 year weekly charts of INTC and CSCO and see what the 'market leaders' are telling us.

 

[Silverbird]

High tech seeing more buy-outs and mergers then IPO's of late. Spending money but it's not a long term investment angel doing it. Some synergy makes sense with a consumer no longer able to get credit cards or a home equity loan by breathing, the overall market size will shrink. Buying out your supplier or customer will elminate some costs. But a company can also get too stretched out to manage and that can lead to mistakes and crappy quality control. And we can't afford that - quality and brand name are what we hold over the other producers that only have price on their side.

 

[Birchtree]

Some companies will buy out another company to get their tax losses - thus saving on taxes. You could see that in banking.

 

[Silverbird]

Some companies will buy out another company to get their tax losses - thus saving on taxes. You could see that in banking.

I would think that works best in finance?

 

[Steadygain]

http://www.nytimes.com/2010/09/09/business/global/09trade.html?src=me&ref=business
High Tech JOBS - Doing incredibly well !!

CHINA

Changsha and two adjacent cities are emerging as a center of clean energy manufacturing. They are churning out solar panels for the American and European markets, developing new equipment to manufacture the panels and branching into turbines that generate electricity from wind.

By contrast, clean energy companies in the United States and Europe are struggling. Some have started cutting jobs and moving operations to China in ventures with local partners.

Hunan Sunzone Optoelectronics, a two-year-old company, makes solar panels and ships close to 95 percent of them to Europe. Now it is opening sales offices in New York, Chicago and Los Angeles in preparation for a push into the American market next February.

How does their Government do things like that?

They gave them lots of 'valuable urban property' at at super bargain basement price.

That reduced the company’s costs and greatly increased its worth and attractiveness to investors.

Now that is Smart.

Then - the Bank lends them money with a tinny tiny 'interest rate' and the government 'reimburses them' for most of the interest payments - to help them 'double' production capacity.

That's what you call 'A Happy Ending'

 

[Silverbird]

China has too many solar panels and not enough places to put them due to their subsidies for the semiconductor production (including solar cells and panels). They also have a large percentage of windmill production that isn't plugged into anything, also subsidized.

Their "Clean Energy" system is incomplete, and dependent on government lending and energy infrastructure development outside of China. Although they don't care how many extra solar panels they have lying around or whether the companies make a profit, it isn't exactly ideal for the United States unless, like China, our goal is to keep everyone employed, even if we don't need it and we don't mind depending on export.