Over the years, technology IPOs have generally dominated the new-issues calendar. Now having said that, let’s take a look at the recent past
- In 2012, the IPO calendar produced 132 offerings and 32 were technology deals, according to the U.S. Securities and Exchange Commission filings. (Note: Unit offerings are excluded.)
- In 2011, the calendar produced 123 IPOs and 35 were technology deals.
- In 2010, the calendar produced 153 IPOs and 32 were technology deals.
Year to date, the 2013 calendar has produced 22 IPOs. By Friday’s close, on March 8, 2013, there were 17 winners and five losers. The average gain for all 22 was 19.2 percent. The Nasdaq Composite Index was up 7.45 percent over the same time period.
Tech’s Place at the Table
This time last year, both IPOs and the Nasdaq Composite were doing better. By Friday’s close, on March 9, 2012, the calendar had produced 24 IPOs. Twenty were winners and four were losers. The average gain was 22.5 percent. The Nasdaq Composite was up 14.8 percent, and technology IPOs were in play.
Last year, about 25 percent of the IPOs priced by March 9, 2012, were tech deals. Seven technology IPOs had been priced by March 9, 2012. There were six winners and one loser. The average gain for all seven was 42.9 percent.
In contrast, in 2000 – an Internet bubble year – the IPO calendar produced 422 offerings. By Dec. 29, 2000, there were 136 winners, 282 losers and four unchanged. The average LOSS was 19.6 percent. But the Nasdaq Composite fared worse. It closed DOWN 39.3 percent in 2000.
Of the 422 IPOs that were priced in 2000, 275 were technology deals.
To recap: More than half of the IPOs priced in 2000 were tech offerings.
This brings us back to the present: 2013’s only technology IPO finished the week as a loser. It was Professional Diversity Network (IPDN), a Chicago-based operator of online networks to serve diverse professionals.
Professional Diversity priced its IPO of 2.6 million shares at $8 each on Monday, March 4. The deal was adjusted from 1.8 million shares at $10 to $12 each. The IPO opened at $7.93 on Tuesday morning. It closed on Friday at $7.19, DOWN 10.1 percent from its initial offering price.
Connecting the Smart Grid
The Wall Street chatter from the IPO handicappers is clear: They expect this week’s technology IPO to do better.
Silver Spring Networks plans to price 3.7 million shares at $16 to $18 each on Tuesday evening. The IPO is expected to start trading Wednesday morning on the New York Stock Exchange under the proposed symbol “SSNI.” The joint-lead managers are Goldman Sachs and Credit Suisse. The co-managers are Piper Jaffray, Stifel, Baird, Canaccord Genuity, Evercore Group and Pacific Crest Securities.
Based in Redwood, California, Silver Spring Networks is a provider of networking platform and solutions that enable utilities, such as electric, gas and water utilities, to transform the power grid infrastructure into the smart grid. The smart grid connects millions of devices that generate, control, monitor and consume power, providing timely information and control to both utilities and consumers. Silver Spring Networks was formed in 2002. It has about 566 employees.
For the year ending Dec. 31, 2012, Silver Spring reported a net loss of $89.7 million on revenues of $196.7 million, compared with a net loss of $92.4 million on revenues of $237.1 million for the same period a year ago. The company reported an accumulated deficit of $550.5 million as of Dec. 31, 2012.
On the bright side:
- Silver Spring reported a backlog of $745 million as of Dec. 31, 2012.
- Entities affiliated with Foundation Capital will purchase from Silver Spring in a private placement shares of common stock with an aggregate purchase price of about $12 million, at a price per share equal to the initial public offering price with the closing of this offering,.
Silver Spring Networks plans to sell all of the shares in the offering. It expects to have about 44.4 million shares outstanding after the offering and the private placement.
That brings us to next week with three deals on the calendar. One is a technology IPO.
Disclosure: Neither the author nor anyone else on the IPOScoop.com staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and IPOScoop.com staff do not issue advice, recommendations or opinions.