Is the Sun Setting on This IPO Market?

Our cowboy in Colorado says, 'Go whip 'em and drive 'em.'
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When things look like they'll never end, they are about to.

I wrote that back on May 3, 1999. Boy, was I early.

Who could have known that it would be almost a full year later that we would see our first real signs of a slowdown in the IPO market. Back then it was easy for me to be a little guarded about my hopes for a prolonged bull market for IPOs. By that time we had been rocking steadily for almost seven months and I was long past beginning to anticipate

The End

. Right now, today, it would be very easy for any one of us to assume that the IPO party is over. So, what if it is?

This has been the longest run in the IPO market that I, or anyone I know, has ever seen. Who among us would have a legitimate beef if it shut down for a while? Anybody who has been involved in any meaningful way in the deals over the last, what,

16 months

, has made plenty of dough. Yup, we've grown fat at the trough.

But what if it's


over? What if what we're seeing is just the same shift toward quality that is taking place in the broader market? If that's true, then we may still have plenty of deal flow to graze on. Take a close look at the offerings that are expected to price this week and note those where I have highlighted things such as profitability. These are the deals that will win the "IPO Beauty Contest," the one where fund managers who are under pressure to justify their positions are the judges. These are where I would put my money if I were involved.

Always the recycler, I'll leave you with another chunk of evergreen advice from my May '99 column:

"This is not the way it usually is. This will end someday, and when it does, any multipoint premium will look pretty darned good! My advice? Trade like it could all end tomorrow, because it just might."

Now go whip 'em and drive 'em.

Ben Holmes is the founder of , a Boulder, Colo.-based research boutique (now a wholly-owned subsidiary of specializing in the analysis of equity syndicate offerings. This column is not meant as investment advice; it is instead meant to provide insight into the methods of new and secondary offerings. Neither Holmes nor his firm has entered indications of interest in any of the companies discussed in this column. Holmes' This Week in IPOs column appears Sundays, This Week's Secondaries appears Tuesdays, Upcoming Lockup Expirations appears Wednesdays and The Quiet Period appears on Fridays. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Holmes appreciates your feedback at