Tech investors are sidling up to the bar again after the “Facebook hangover,” only this time they are minding their P’s and Q’s.
“In a sense, the tech IPOs are back,” said Francis Gaskins, president of IPODesktop.com. Only seven tech or Internet companies have gone public since Facebook’s IPO; by comparison, Gaskins said now there are 20 technology companies in the IPO pipeline. The difference is that the offerings are smaller and priced to lure institutional investors rather than emotion-driven retail investors.
“In general, institutional investors are more excited about the B2B companies,” said Jay Ritter, a professor of finance at the University of Florida. “They’re not as prone to overvaluations because of the consumer name recognition.”
On the other hand, individuals tend to place too much emphasis on personal experience, he said. Facebook’s messy IPO and subsequent drop in valuation threw cold water on the IPO hopes of other consumer tech and Internet companies.
“For the serious IPO investor, Facebook is history,” Gaskins said. “The retail people will never stop talking about it.”
Facebook’s CEO Mark Zuckerberg tried Tuesday to soothe investors’ frazzled nerves, asking them to be patient while the company improves the site and develops more products. His appearance alone, after what seemed like weeks of silence while the shares stumbled and then languished, helped lift the social network’s shares by 3 percent Tuesday. The shares
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