| Tech Wreck Causes Low in IPO Market
However, unlike the historic times witnesses during the first quarter of 2000, the first three months of 2001have nothing to be proud of. In all, we've completed a full reversal in the IPO market. In 2000, 140 IPOs priced (excluding closed end funds, units and deals priced under $5) totaling a record $32.1 billion global dollar volume. Now the setting is totally different with tech out and alternative energy appearing to be the new fad. For the quarter, only 19 companies went public (20, if you count the unit offering from GMX Resources (ticker: GMXR) in the mix) with a total deal size of $8.3 billion, of which $6.6 billion was raised by the offering companies, with the remainder ($1.7 billion) going to selling stock holders. The clear record for the number of deals in the first quarter took place during 1996 when 150 firms joined the Wall Street parade. Despite uncertainty for the days and weeks ahead, IPO analysts' hope that the Nasdaq reaches capitulation and that the calendar resumes a more normal pace. At this point, the IPO calendar resembles a dumping ground because the first order of business is to get the Nasdaq back on track. Right now, the beginning of the second quarter looks quite bleak with only four companies tentatively scheduled to go public. According to our research, the first quarter of 2000 almost took on a different meaning of having the worst period on record. In 1982, only 16 deals were priced and if we were to stack up the current quarter's proceeds against other periods, we just edged out the $8 billion raised in the first three months of 1993. "Until we see a convincing turnaround, the IPO market will stay pretty much dead," said one anonymous source. "We're at a pretty historic low and while we may be overshooting the downside of this market, the more pedestrian type of companies have a better chance of completing an IPO." Although, the quarter was horrific, to say the least, we did manage to see three billion dollar transactions take place and that's exactly what transpired during the comparable period in 2000 where firms Infineon Technologies (ticker: IFX), John Hancock Financial (ticker: JHF) and Sun Life Financial (ticker: SLC) debuted. Collectively, they raised more in proceeds than what we accomplished for the entire first quarter of 2001. This time around, the three mega-offerings of the quarter were Agere Systems (ticker: AGR.A), Chinese oil outfit CNOOC (ticker: CEO) and KPMG Consulting (ticker: KCIN), whose combined deal size was a tad under $7 billion and that really tells the entire story of the depressed quarter just completed. While we saw three mega-offerings in both periods, we should note that this year's crop targeted to a different crowd. For example, Agere was forced to complete an IPO in an unfriendly environment because of the financial woes at its parent Lucent Technologies while CNOOC debuted in its second run at public life and succeeded with its transaction because of the fascination with alternative energy stocks. The last deal was the most solid in terms of rigid structure. KPMG Consulting, according to analysts was attractive because it gave investors comfort by sinking into a well-known entity.
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