Tech stock investors aren't the only ones with a sinking feeling as the
notches loss after loss.
Investment banks can identify: Many of 1999's IPO leaders lost ground in the 2000 rankings, as technology offerings dried up and Old Economy deals took up the slack.
In a list of the top 10 IPO underwriters released by
, the most noticeable shifts were the slides of tech heavyweights
. Chase H&Q and its newly minted merger partner J.P. Morgan limped to the No. 8 slot, from fifth place a year ago, while Robertson Stephens slipped to tenth place from seventh.
"Chase and Robbie Stephens were definitely hit hard with the downturn in the tech sector," says Frank McGee, senior analyst at CommScan EquiDesk. "They have traditionally been two of the most technology-reliant banks -- it's a tremendous part of their volume."
That worked fine in 1999, when the Nasdaq Composite Index jumped 86%. Needless to say, it didn't play out so well in a year when the tech-laden measure shed 39%.
J.P. Morgan Chase
has already warned it expects
weaker capital markets fees and sagging trading revenues to hurt fourth-quarter results.
Salomon Smith Barney
rose to fifth from eighth, due in large part to its chunk of the mammoth
offering. That $10.6 billion deal also helped the fortunes of top underwriter
and No. 4
McGee says though Salomon had a fairly diversified mix of business in the offering pipeline this year, telecom accounted for much of its business. "There are some banks that are known for being elephant hunters," he says. "What they make on those scores helps them in a major way."
Elsewhere, some Old Economy issues were big hits. A doughnut deal helped put
Deutsche Bank Alex. Brown
in the sweet spot. The bank moved up to No. 6 from No. 10 on the strength of the
deal. It looks like their "push into U.S. banking is paying off," says McGee. He notes the company has a "strong presence in healthcare" and also did some work in the dining and lodging sector, which may have offset a still sizable 41% involvement in the tech sector.
also has healthcare deals to thank for moving up to seventh place from No. 11 last year. Goldman,
and Merrill Lynch also benefited from strength in American depositary receipts, which are certificates issued by U.S. banks for shares of stock in a foreign corporation.
Overall, the dollar value of the IPO market rose about 3% to $73.2 billion in 2000 from $70.8 billion in 1999, mostly due to larger average deal sizes. IPO activity dropped by 17%, according to CommScan. "That is a record volume in terms of capital raised in spite of the Nasdaq's drop," says McGee. "That is respectable in a pretty weak year."