Tags: IPO | market | tech | stocks

IPO Market for Tech Stocks Stumbles

By    |   Thursday, 17 April 2014 12:49 PM

Young technology stocks have suffered in recent weeks, with the Nasdaq Composite Index dropping more than 6 percent from its 13-year high of March 6.

That has put pressure on initial public offerings (IPOs) of tech stocks.

"We're obviously in the throes of what feels like a correction for the small-cap and growth-equity companies," David Golden, managing partner at Revolution Ventures, tells The Wall Street Journal.

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A company in Revolution's holdings went public in March and hasn't done as well as the venture capital firm expected, he notes. "We were expecting the proverbial aftermarket pop, and instead it's trading at the offer price."

An overwhelming majority of Internet and software companies that executed IPOs since 2012 saw their stocks drop in the 10 days through April 7, with a median decline of 11 percent, according to Deutsche Bank, Bloomberg reports.

"We all feel like we're at the top of the cycle, and everyone's skating on new ice," Nick Beim, a partner at venture-capital firm Venrock, tells The Journal. "Just how thin the ice is not yet clear."

The tech stock drop is making investors more cautious about IPOs, says Jeff Sica, president of Sica Wealth Management.

"Investors are beginning to look more toward fundamentals in the IPO market, so these growth companies will either have to delay or push out as soon as possible," he tells Bloomberg.

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StreetTalk
Young technology stocks have suffered in recent weeks, with the Nasdaq Composite Index dropping 6.4 percent from its 13-year high of March 6.
IPO, market, tech, stocks
248
2014-49-17
Thursday, 17 April 2014 12:49 PM
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