An Odd Couple Goes Public

The way the tech-stock naysayers see it, the supply of stock from initial public offerings eventually will exceed demand and the whole shaky structure will come tumbling down. This simplistic approach doesn't cut it.

What with newbie mutual fund investors, greater overall investor appetite and even non-U.S. interests clamoring for a piece of the IPO pie (coupled with rapid-fire mergers shrinking said pie), it seems plausible that demand will continue to soak up the generous supply for some time.

Actually, the real fear is that despite obvious shifts in the appetite of tech-stock investors away from slim-margined, consumer-oriented companies and in favor of fast-growing infrastructure and service companies, the steady supply of the former continues. The reason is simple: Venture capitalists funded all these consumer-oriented companies when times were good. Now they must have a "liquidity event," the most attractive of which is an IPO. ...