Investors Still Love Those Money-Burning IPOs

Updated from 8:40 p.m. EDT

Attention all money-losing start-ups: Come on back. All is forgiven.

That's the message that the IPO market seems to be broadcasting -- or, rather, wirelessly Webcasting -- these days.

Call it the return of the prodigal IPO. The velvet ropes, which for so long barred the riffraff from entering the fabulously trendy nightclub that is the public markets, have been rent asunder. It's happy hour now.

So changed is the mood on the public markets that now not only are money-losing companies sweeping through, but their offerings are often oversubscribed and overvalued. And even then, the newly listed stocks continue to rally in the markets.

Such was the case with Glu Mobile , which went public last Thursday at seven times revenue, despite an accumulated deficit of $46 million (the bulk of the $84 million raised in its offering). The stock has now fallen back to its $11.50 a share offering price, but had touched $13.30 on Thursday.

And it isn't alone. In early February, Accuray -- which makes a robotic radiosurgery system that treats tumors -- went public despite a year of losses ($34 million) nearly as large as its revenue ($53 million). Its stock is down from a postoffering pop, but it's still 19% above its $18 offering price.

Shortly after, Salary.com , another company in the red, went public with a market value that was a feverish 10 times historical revenue. The shares have since gained 4%.