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The Facebook IPO may have been a fiasco, but don't put the nail inthe coffin just yet for other tech offerings this year. The success or failure of tech company IPOs will depend on marketconditions, not fallout from Facebook, analysts say. The Facebook IPO was in many ways an anomalous event, a publicoffering of one of the most-hyped companies ever, taking placeagainst market headwinds. The events specific to the whole mess --which ultimately, successfully brought in US$16 billion forFacebook -- don't by themselves mean that a tech bubble has beenburst. "An Internet bubble came and went in one day," said JohnFitzgibbon, who runs IPO Scoop.com . "One thing got overlooked in all the hysteria," Fitzgibbon said."The stock market was not in great shape." On the eve of the IPO,the Nasdaq had come down from earlier highs of the year, and theyare still down. The tech-heavy Nasdaq, which closed Friday at2837.53, down by 1.85, is now about 10 percent off previous highs. Problems with sovereign debt in Europe, fears that Greece willdefault and pull out of the euro, and mixed economic reports in theU.S. have put a damper on stocks lately. "I've talked with investors and they've been grumpy -- things weregetting a bit frothy right up to the Facebook IPO," said CanaccordGenuity analyst Richard Davis. Meanwhile, a lot went wrong with the Facebook IPO itself, startingwith how the offering was put together. Facebook picked ahalf-dozen high-profile investment bankers, led by Morgan Stanley,to see the offering through. "What if putting way too many banks on a cover, thereby slicingfees to insulting levels for everyone, simply makes nobodyinterested or accountable?" asked Davis. "I've said it before, andeven if it hacks off issuers, boards, or whatever -- it is justplain stupid to do IPOs with so many banks on the cover." The underwriters at the last minute increased the size of theoffering and jacked up the offering price to an astronomical value,compared to what the company actually earns. Even based on the value of Facebook shares a week after the IPO,down about $7.00 from the initial asking price, the company'sprice-to-earnings ratio is 72.20. In other words, it costs about 72times the amount that Facebook is earning per share to buy thatshare. Apple, arguably the most successful company on the planetright now, has a P/E ratio of only 13.68. (Facebook's earnings pershare are $0.43, while Apple's are $41.04). Then, stories from Reuters and the Wall Street Journal, amongothers, reported that a Morgan Stanley analyst had cut his revenueforecast for Facebook in the days before the offering, and may haveonly told top clients verbally, rather than spreading the wordpublicly. If true, this action could be interpreted as aninfraction of financial laws, and now spokesmen from U.S. House andSenate committees monitoring the financial sector, as well as thestate of Massachusetts, say they are looking into the matter. Problems with the Nasdaq computer system on the day of the IPO madematters worse. The glitches delayed trade notices, and a number of trading firms lost money due to mismatchedFacebook share prices. About 30 million shares' worth of tradingwere affected, the exchange estimated. The multiple underwriters, the price and size of the offering, thetechnical glitches, not to mention the nature of Facebook itself,all combined to form a perfect storm unlikely to be repeated. "It was a one-time event, a media blitz combined with a Wall Streetblitz," said IPO Scoop.com's Fitzgibbon. To be sure, the Facebook fracas may put a near-term damper on techIPOs from smaller companies and increase scrutiny on earningsresults for the quarter. "The bungled IPO has increased investor skepticism, and this meansJune quarter shortfalls will be severely punished and near-term hotIPOs more difficult to complete at astronomical valuations," saidCanaccord's Davis. "But these are both good things." The point is that ultimately, the Facebook IPO fiasco may mean thattech companies teeing up for IPOs this year, and their potentialinvestors, will simply be more realistic relative to marketconditions. Out of the 173 IPOs in the U.S. over the past 12 months, 37 havebeen for tech companies -- more than for any other sector. Andthere are a number of interesting, up-and-coming tech companiespreparing for IPOs this year. Companies mentioned by Davis andFitzgibbon include firewall-maker Palo Alto Networks, marketingautomation vendor Eloqua and SaaS provider Workday. And while U.S. economic indicators have been mixed lately, theytend to start looking good in the months before a presidentialelection, Fitzgibbon said. In a footnote to the week's financial news, Canaccord's Davis notedthat Ariba's market capitalization -- its share price multiplied byits number of shares -- peaked at $40 billion 11 years ago. Thisweek, SAP announced it was buying the company for $4.3 billion. At the right price, you can close any deal. We are high quality suppliers, our products such as Plant Vigra , Herbal Slimming Pills Manufacturer for oversee buyer. To know more, please visits Male Sex Enhancement.
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