Investors knew it would take awhile before the IPO market shook off the tech wreck. But not 12 years. That's how long, though, it's taken for the initial public offering market to show signs of life after the dot-com IPO boom and subsequent spectacular bust.
After being almost comatose for years, the IPO market has hosted 63 deals this year and is expected to launch nine more this week, which would be the best start to a year since 2000, says Renaissance Capital. Add to that the biggest-ever technology IPO in Facebook -- which is expected next week -- and 2012 looks like the year IPO investors' bruises from the 2000 debacle may finally fade.
"There's a huge pipeline" of IPOs, says Kathy Smith of Renaissance Capital. "There's lots to choose from for investors."
Even some entrepreneurs say the reception their IPOs are getting exceeded their expectations. "It's a surprise how much demand and interest there was" for the IPO of Infoblox, says CEO Robert Thomas. Shares of Infoblox, which helps companies find patterns in corporate data, jumped 33% their first day of trading in April.
The recovery of the IPO market has profound meaning not just for investors in newly public companies, but for the U.S. economy and all its participants. Since the stock market is a main pool of capital that allows companies to fund their expansion, grow and ultimately hire, a robust IPO market is critical to keeping money moving into new ideas. Venture capitalists, too, need a robust IPO market to allow them to cash in on their winners so they can move on to fund the next big idea.
The IPO market is regaining its swagger thanks to a bevy of fortunate coincidences working in concert to give investors the courage to step in and buy.
The strong stock market is...
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