No Bubble in the Offerings

Since June 1, 104 companies have gone public and 58 more have registered, according to IPO Vital Signs.com, which tracks public offerings. By the end of the year, the IPO class of 2004 will total 200 to 250, according to various estimates; either way, that'll more than the combined offerings in 2003 and 2002.

Thomas Weisel Partners expects 250 offerings this year, and 350 in 2005. Graeme Howard, editor of IPO Vital Signs.com, is a bit more conservative, saying he believes there will be about 200 offerings in 2004.

Meanwhile, investors who did well when the stock market roared to life in 2003 need someplace to put their money. "VCs are still overfunded. Perhaps not by the [huge amounts] you've read about, but overfunded," said Jim Breyer of heavyweight venture firm Accel Partners.

As the IPO market comes back, some investors are worried that bankers or VCs might take advantage of the boomlet by bringing companies public prematurely.

"We're seeing inflated values in companies that have gone out recently, and some seemed barely ready to go public," said Joanna Rees Gallanter, founder and managing partner of San Francisco-based Venture Strategy Partners, which has assets of $200 million.

Howard disagrees. "The level of maturity of companies is higher now than it was during the bubble. You're seeing companies with significant revenue and earnings, and seasoned executives running them," he said.

Robertson believes that if money begins to pour into mutual funds and the pressure mounts to fund IPOs, quality could get thin at some point. "But we're not there. I see solid prospects like Google and Salesforce.com," he said.

New-Issue Environment Becomes More Inviting After a drought, IPOs show promise of a rebound

Source: Thomas Weisel Partners

Up, but Not Away

Who's hot in the recent IPO crop?

So far, the runaway winner is Vaso Active Pharmaceuticals(VAPH Quote), a small-cap stock that debuted on Dec. 9 at $5 and closed Wednesday at $28.50, a gain of 470%.

But one wonders if Vaso best epitomizes the new, "more mature" IPO market or harkens back to the slack standards of the boom era.

The Danvers, Mass.-based company was taken public by the relatively unknown Florida underwriter Kashner Davidson Securities and is not yet profitable. It sells a treatment for athlete's foot called Termin8, which it says is endorsed by the American Association of Medical Foot Specialists. But there is a dispute about whether the claim is true. Insiders hold a bit more than 75% of the shares.

Next best on the performance list is biopharmaceutical company Neurochem (NRMX Quote), which has appreciated 88% since debuting Sept. 18. The company has three orally administered product candidates in clinical trials, including Alzhemed, for the treatment of Alzheimer's.

For the quarter ended Dec. 31, the Toronto-based company's net loss amounted to $9.9 million, or 34 cents a share, compared with $6.6 million, or 31 cents a share for the same period in the previous year. For the six months ended Dec. 31, 2003, net loss amounted to $16.8 million, or 63 cents per share, compared with $10.5 million, or 52 cents per share, for the same period in 2002.