- Inc. Technology - http://technology.inc.com -
Will Delays Hurt Groupon and Zynga’s IPO Chances?
Posted By Dave Smith On August 15, 2011 @ 5:26 pm In Apps,Gaming,Internet and Online Business | 3 Comments
Following Standard & Poor’s downgrading [1] of the U.S. credit rating from AAA to AA, a record number of companies delayed their initial public offerings this week, wary to sell their shares on the public market. About 83 percent of this week’s scheduled IPOs, between 9 and 13 events, were delayed or postponed indefinitely, the record for “most [IPO postponements] in one week in more than a decade,” said Bloomberg’s Emily Chang.
Given the volatility of the market and the inconsistent track record of tech stock, many are wondering if Groupon and Zynga will continue to delay their IPOs. While their IPO plans are still on track, both companies amended their S-1 forms this week, and many wonder if general interest in the companies is cooling.
“Investors are looking for unique companies that are capable of growing through all kinds of market conditions and that have a product that is gaining significant traction,” says Paul Bard, director of research at Renaissance Capital. “We don’t know how much froth has been taken out of the Internet market.”
“It’s hard to say what impact if any this week will have on [Zynga and Groupon's] plans or their pricing, says Dow Jones Investment Banker’s John Morris. “But it’s safe to say the companies and their bankers weren’t happy about the events this week.”
Several of last week’s IPOs debuted to disappointing results. Online back-up data firm Carbonite raised $62.5 million, about 40 percent less than expected, and priced its shares at $10, less than the anticipated $15 to $17 a share.
Between January 1 and June 30, 2011, 79 IPOs have generated $24.3 billion. During the same time frame last year, 70 IPOs generated $9.4 billion.
Read more from VentureBeat [2].
Article printed from Inc. Technology: http://technology.inc.com
URL to article: http://technology.inc.com/2011/08/15/will-delays-hurt-groupon-and-zyngas-ipo-chances/
URLs in this post:
[1] downgrading: http://www.nytimes.com/2011/08/09/business/standard-poors-lowers-more-ratings.html
[2] VentureBeat: http://venturebeat.com/2011/08/12/ipo-delays-august/
Click here to print.
Copyright © 2011 Inc Technology. All rights reserved.