Photo by Michael Nagle
When gaming giant Zynga goes public this week, it will cap off a year of big, brand-name tech IPOs. But 2011’s bumper crop hasn’t been exactly blemish-free.
Although many of the newly public tech companies enjoyed healthy pops when they debuted, only a few were still trading well above their offer price as of Friday. LinkedIn, Zillow, and Groupon were up by double-digit percentages, but Pandora, Zipcar, and Demand Media were all way under their opening day prices.
But David Menlow, president of IPOfinancial.com, said, “I think the mood is upbeat.” No small feat, he added, given the market conditions this summer.
Still, industry watchers say that the bloom is off the tech-sector rose—at least for now.
“This summer . . . the valuations people were talking about were preposterous,” said Anupam Palit, an analyst with GreenCrest Capital. The choppy markets and recent tech IPO trends have made investors more cautious, he says, and he expects that to continue into 2012.
But Facebook’s IPO could be a different story. “[That’s] the seminal moment in the history of social media,” he said with a laugh. “We tend not to overhype the sector. . . . But they’re a special company.”
