Many analysts say a big, successful Facebook IPO, expected in the spring, is just what the market needs.
“A Facebook IPO will be a mammoth seismic event that will start a small tidal wave,’’ said David Menlow, president of IPOfinancial.com, a Green Brook, N.J., firm that tracks IPOs. “Facebook will embolden a lot of companies to feel that the technology sector is on an upswing.’’
IPOs are key tools for companies to raise money to grow and for venture investors who backed firms early to cash out, freeing up money for them to invest in other young and promising businesses. A healthy IPO market is particularly important to a state like Massachusetts, where the economy is driven by innovation, new technologies, and emerging companies.
Eight Massachusetts companies have filed paperwork with the Securities and Exchange Commission to go public, but have yet to move forward, price shares, and begin selling them on stock exchanges.
None of the companies responded to requests for comment. Financial regulations require that companies refrain from discussing upcoming initial public offerings.
Successful IPOs by high-profile companies like Facebook can help create a favorable climate for new offerings, analysts said. The spectacular IPO launched by Internet browser company Netscape Inc. in 1995, for example, opened the floodgates for scores of IPOs that eventually led to the dot-com boom - and bust.
In 2000, Massachusetts companies launched 34 IPOs, a high-water mark that hasn’t been approached since.
“When deals in a particular industry, especially marquee deals, get done, it definitely creates a lift for the whole sector,’’ said Scott Gehsmann, a partner with consulting company PricewaterhouseCoopers LLP’s transaction services group.
A steadily rising stock market can also spur the IPO market, which also suggests new offerings will pick up this year. On Friday, the technology-heavy Nasdaq composite index closed at its highest level since the end of 2000.
