This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Tech IPOs Stuck in Holding Pattern, CEOs Say

NEW YORK ( TheStreet) -- The fallout from Facebook's (FB - Get Report) troubled IPO has spoiled the market for otherwise healthy companies looking to sell shares for the first time, technology CEOs say.

Infoblox (BLOX - Get Report) and Demandware (DWRE - Get Report) enjoyed favorable public debuts prior to the Facebook fiasco, but warn that the goalposts have shifted for companies following suit.
Facebook's IPO has shifted the goalposts for other tech IPOs.

"Unfortunately, because of all the hype about Facebook and because its IPO wasn't successful, it's going to affect other companies that have fundamentally good businesses," Robert Thomas, the CEO of Infoblox, said in an interview. "It does have a negative effect on the tech space -- investors are wary."

Infoblox, which recently posted blowout third-quarter results, made its public debut in late April during in a busy week for tech IPOs.

"In the week that we went public, Splunk (SPLK - Get Report) and Proofpoint (PFPT) also went public," Thomas said. "There was high sentiment about tech companies -- you would have expected Facebook to accelerate that sentiment, as opposed to collapse it."

Reports emerged this week that online travel specialist Kayak had stalled its push toward an IPO. Citing people familiar with the matter, The Wall Street Journal reported that Kayak didn't launch its IPO "roadshow," which had been expected to start around Memorial Day.

Kayak declined to provide comment for this story.

Scott Sweet, senior managing partner at IPO advisory firm IPO Boutique, described the Facebook offering as nothing short of a "disaster."

"I have never seen anything like it," he said in an interview. "Facebook has really cost investors, in some cases, millions -- they have little love for [lead underwriter] Morgan Stanley (MS)."

Until the Facebook share sale, 2012 had been a good year for tech IPOs. Prior to the Facebook offering, IPO expert Renaissance Capital said tech firms have accounted for 20 U.S. IPOs valued at more than $50 million each this year, the most in any sector. Last year there were a total of 48 tech offerings.

Firewall maker Palo Alto Networks and cloud specialists Reval and ServiceNow all filed S-1s with the Securities and Exchange Commission recently. But IPO Boutique's Sweet doesn't anticipate any initial share sales soon. Companies gearing up for IPOs, he says, are "kind of in a holding pattern."

Palo Alto Networks, Reval and ServiceNow haven't yet responded to requests for comment on this story.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BLOX $25.98 -1.70%
DWRE $70.65 -0.07%
FB $86.90 -0.01%
SPLK $69.21 -0.37%
AAPL $126.06 -0.43%

Markets

DOW 17,699.81 -58.10 -0.33%
S&P 500 2,071.89 -5.53 -0.27%
NASDAQ 4,995.2040 -17.9190 -0.36%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs