Q11 2012 was the most active quarter for IPOs since the fourth quarter of 2007. The figures also showed a marked decrease in mergers acquisitions and buyouts. There has been less activity in that area leaving it lower than it was in Q2 2011. One explanation for the fall in mergers is Google’s lack of acquisitions. The company was the leader in such moves in 2011 with 12, but that included Motorola. That particular buy may have stifled their interest for a time. Nevertheless the increase in IPOs will be seen as a good thing, demonstrating the increased confidence of company’s in the wake of a US recovery. Companies that had been delaying during the crisis for fear of being undervalued are more confident now as the market roars.
The figures showed that the twenty companies that went public in the first quarter of this year raised about $1.4 billion between them. The highest profile IPOs were Yelp!, the internet reviewing platform, Millenial Media, a mobile based advertising platform, and Brightcove, an online video provider. The three companies show the prevalence of tech start ups among the most prominent IPOs. This comes in a year where the most valuable and certainly the most high profile company going public will be Facebook. The social media giant is expected to announce an IPO for some time this Summer and current valuations put the company at around $100 billion, dwarfing the money invested in the first quarter.
The increased prevalence of internet based services in big IPOs begs the question, is the economy really moving that far onto web platforms or is this a bubble like the dotcom bubble of over a decade ago? The question is a necessary one as tech company’s seem to dominate news on IPOs and start ups in other areas are of a much slimmer profile. It is possible that the weight of transaction, production and employment has moved onto the web with great enough magnitude to create such a shift. Even if that were true the web has only been around for twenty0-two years and has been fully commercial for a much shorter time. We know little of its future and legislation looming may control actions on the platform. It is a cautious time to invest in the web. Time will tell and we won’t truly know whether this is a bubble until some time from now, Facebook’s figures show we have a ways to go before the market will, if it needs to, correct itself