Tech IPOs down, but not out in midst of financial crisis
Steve Chiotakis: Internet deal giant Groupon is likely to go public within the next couple of months. The New York Times says an initial public offering or IPO could come as soon as October. But other tech companies are still waiting out the economic storm.
Max Wolff watches the tech sector for Greencrest Capital. He’s with us now. Max, welcome.
Max Wolff: Thanks for having me.
Chiotakis: You got it. All this uncertainty we have in the market — why would a company want to push ahead with an IPO?
Wolff: Well there’s certainly always the financial angle on an IPO — companies do want the money. They also want to prove out that they can pass muster. And there’s a lot of hope in the tech sector — particularly for the high-flyers — that they’re going to be vindicated with high multiples and mass excitement, once they’re out there and the restrictions are lifted on them talking about their future and their present prospects.
Chiotakis: Who are the high-flyers?
Wolff: Well I think we’re looking at a Zynga, we’re looking at a Facebook, we’re looking at a Groupon. We’re looking at a Living Social, probably not too far behind the pack there.
Chiotakis: Well Max, you mention Facebook and Zynga. Do you think we’re going to be seeing a cooling effect in the tech IPO market because of the lousy economy?
Wolff: I think that the entire economy has been affected by both the unusual volatility and sharp, violent, sideways actions we’ve seen in the market. In addition to which, I think we’ve also seen the euro crisis go from being something people hoped was manageable to something that keeps erupting in increasingly disastrous bursts. All that being said, I think that the crop of “best-of” coming out to the market now in the social media and new media space will be very successful. I think the bigger question is — are there other companies of that size, scale, and profitability behind them? And that’s a question that remains to be answered by the forward progress of time.
Chiotakis: Max Wolff of Greencrest Capital, Max thank you.
Wolff: Always my pleasure, thank you.
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