Technology IPOs -- which seemed so hot only a few months ago -- have gone ice cold. And the deep chill isn't limited to just one slice of the tech market. Among those fearing financial frost bite: Box, GoDaddy, Good Technology and Zoosk -- each of which has pushed back IPO plans amid the current market turbulence.
But that's not all. Sources tell After Nines inc. that at least six sub-$100 million cloud and mobile companies (all located in the U.S.) have backtracked from their IPO preparations -- preferring instead to explore potential M&A deals. "Even in a good economy, an IPO isn't for the faint of heart," said one CEO who is pushing back his company's IPO timetable to the second half of 2015.
Plenty of privately held, fast-growth companies are following suit:
- Box Inc., the cloud file sharing service, has delayed its IPO until 2015. CEO Aaron Levie recently conceded that Box announced its IPO plans far too early.
- Chatter about a potential $100 million GoDaddy IPO surfaced in June 2014. But most company watchers now think the money-losing GoDaddy won't see an IPO this year.
- Good Technology -- the enterprise mobility management company -- seemed like a sure IPO only a few months ago. But earlier this week, Good put its IPO plans on ice until 2015 because of the weakening market.
- Zoosk, yet another online dating site, also apparently got cold feet...
Behind the IPO Freeze Out
How did so much change so fast? Only about four weeks ago, Alibaba completed a $25 billion IPO -- the biggest ever. Now, market pundits assert Alibaba's IPO coincided with market highs. More recently, stocks have been tumbling as investors worry about the long bull run coming to an end.
The damage has accelerated amid the following seven fears, according to The Guardian: (1) A US economic slowdown, (2) Anxiety over Ebola, (3) Germany on the brink of recession, (4) the return of a Eurozone concerns, (5) geopolitical tensions, including the Russia crisis, (6) speculation that at least one big Wall Street bank may fail again, (7) and heck, it's just dreary old October -- again.
Do the Opposite
Remember, when markets fall it means stocks are on sale. Deep discounts. Low prices. Potential bargains. So while everyone else prepares to run for the exits, keep some cash ready to scoop in and buy up the discounted offerings.
By the way: After Nines inc. has no near-term IPO plans. At least none that CEO Amy Katz has shared with me.
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