You might think the IPO market is gaining momentum, thanks to an improving economy and a high-profile offering like Facebook in the works. Not so fast.
There have been 16 IPOs priced so far in 2012, about 30 percent fewer offerings than at this point last year, according to Renaissance Capital, a research firm that tracks new stock sales. This year’s crop has raised about $1.5 billion, compared with $8 billion by this time in 2011. The number of companies that started the process of going public this year but remain in the IPO pipeline is down modestly.
The results haven’t been great for companies that have taken the leap and gone public very recently. Among the dozen IPOs launched this month, a large majority of companies reduced the price for their stock, sold fewer shares than expected, or both. This was particularly true for technology companies going public.
These are not exactly welcoming conditions for Brightcove, which sells cloud-based resources to distribute professional digital media on the Internet. The company and its founder, Jeremy Allaire, saw the video future of the Internet eight years ago and started to build new technology tools for it.
Brightcove grew annual revenues to more than $63 million by last year but lost $17 million in 2011. The company has lost $35 million over the past two years. An IPO at the mid-point of Brightcove’s price estimates would value the company at about $290 million.
In many ways, Brightcove looks like the classic tech company going public. It is growing fast in a hot sector, but still small and losing a lot of money in relation to revenues. We’ll find out this week whether that familiar story appeals to investors.
Vanguard leads the way When it comes to mutual fund sales, a handful of companies grab most of the business and everyone else fights for the leftovers.
