Ah, 1999. The days when companies were going public like raindrops, and stock prices were soaring through the roof before the sound of the opening bell had even faded. The days when young companies counted the minutes to their IPOs and then reaped the multimillion-dollar benefits.
"An IPO was a cheap and easy way to raise money," says Nick Hanauer, a founding partner of Seattle-based VC firm Second Avenue Partners and an early investor in Amazon.com. "The markets were frothy and irrational."
Skip ahead to spring 2001. Those heady days of 1999 now seem like a distant memory. Of the 717 IPO filings in 2000, according to business Web site Hoover's Online, 201 never saw an opening bell. In fact, by fall 2000, more companies were filing to withdraw their IPOs than were filing to go public. This year hasn't fared much better: More than 50 companies withdrew their offerings before March alone. While only a short time ago there was a mad scramble to pick up new offers, even if they were overvalued, burned investors now run from anything that smacks of an IPO. AltaVista is just one high-profile name to pull its offering in recent months as a result.
Those Who Dared
Companies going public in this climate are finding that things certainly aren't what they used to be. Take Loudcloud Inc., the Silicon Valley tech company founded by Marc Andreessen of Netscape fame, which went public in March only to have its shares immediately fall below the IPO price of $6 per share. The company's market value was estimated at $450 million, a far cry from the $1.3 billion Andreessen wanted.
"The market is awful," says Mitch Mumma, a general partner with VC firm Intersouth Partners in Durham, North Carolina. "Companies that were considering going public a year ago aren't considering it now."
For companies that are holding back, it's a waiting game. Here are the stories of three that pulled their IPOs late last year--and how they're hanging tough until the market improves.