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Archive for March 11th, 2010

Here is an article from The Wallstreet Pit.

“Paul Kedrosky made a wish for the new year: “Remember IPOs? Way back when your parents were messing about with technology stocks in the late 1990s, pretty much every company that could went public, mostly via Nasdaq IPOs…. I’m wagering we’re about to enter a similar period in 2010.”

He was hoping for a Walter Sobchak moment:

Has the whole world gone crazy? Am I the only one around here who gives a shit about the rules? Mark it zero!
– The Big Lebowski (1998)

The Next Netscape

The dot-com boom was sparked by Netscape’s IPO, just as Apple’s IPO launched the PC Bubble in the early ’80s (complete with companies with goofy names like Kentucky Fried Computers).

Will we have our Netscape Moment this year? It is now looking less likely.

Today’s Netscapes are companies like Skype, Twitter, Facebook, Zynga and (maybe) Yelp – winners in social media. TechCrunch’s Erick Schonfeld gives his top 10 IPO candidates. Yet it seems rather than rush for glory in the public markets, these companies are inclined instead to take in private equity and stay private. Facebook for example took a big slug from a Russian PE firm, and took itself out of the IPO sweepstakes for now.

Instead of the hot new companies, we are seeing a lot of ’90s retreads finally getting their chance to exit, such as the indomitable Force 10, which has more than $200M VC financing in it, and no buyers. Their only exit left is the unsuspecting public! We are also seeing cleantech names, like Tesla, line up to go out – companies which need tons of capital to grow. (Disclosure – I have an indirect VC interest in Tesla.)

Companies with hot growth prospects in a new sector can be a Netscape. Google got out, and at the time a lot of VCs thought it would be the new Netscape. No dice. Filings ratcheted up from 47 by Aug 2003 to 236 by Aug 2004, but few got out. Google was really a second generation search firm, a category hot in the prior IPO period, not the start of a new trend.

Retreads will not make an IPO craze. Cleantech may have the allure and cache to do so, but so many of them are long-term science projects which require huge capital to get going (think – solar farms in the desert). A bunch of solar firms went public in 2006, and a lithium-ion nanotech battery maker, A123, went public on late 2009 (cleantech and nanotech in one company!), but no huge wave of cleantech IPOs has emerged, yet.”

Read the full article here.

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