NEW YORK (TheStreet) -- The market has not been kind to IPOs of late as investors have quit buying blindly and starting taking a microscope to the S-1 filing.
Several companies lately have gone public with poor financial statements, choosing instead to promote growth in sales or subscribers over profits, and their stocks haven't fared well. LinkedIn (LNKD) has been something of an exception with its shares managing to stay at comparatively lofty levels, despite falling from the heights reached on their first day of trading.
Boingo Wireless (WIFI) seems to have been caught in the downdraft. The Los Angeles-based mobile Wi-Fi company priced its debut at $13.50 per share, and closed Monday's regular session at $9.12, down 32%.
The buzz was very high around the company when it launched on May 4, but the shares never cooperated, sliding in their very first session. The stock got a lift back to $10 when the quiet period ended, but hasn't been able to hold that level. Chief Executive Officer Dave Hagen spoke to TheStreet recently, talking about how his company's maturity level is very different from other IPOs of "concept" companies. For a start, Hagen stresses that Boingo Wireless brings in cash and is profitable. TheStreet: So are you surprised at the reaction to the stock?Hagan: Well, we entered into a tough market but fundamentally nothing has changed with the company. Boingo had a great first quarter. You know, we're right where we expect to be. Building the company over time, it's a marathon, not a sprint. We're excited about where the company is. We're excited to be public and continuing to grow the business. That brings up a point because it's very expensive to be a public company. Do you feel it was worth going through all that trouble and the added expense for the company? Hagan: Well, it is certainly expensive to operate as a public company but it's really the sort of the next phase of the company where we want to take Boingo. We needed additional funding to continue to build out WiFi networks and all sorts of new types of venues, new locations and it was part of the process. We've been around for a decade and we've done very well. We're a profitable company but we needed a little bit larger capital infusion to be able to be able to deliver all the things that we wanted to do over the next few years so it was the right thing for us to do at the right time to do it.
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