NEW YORK -- The pipeline of initial public offerings for 2010 looks promising as private equity firms look to cash in on their investments after coming back to the nearly defunct market in the fall.
Online networking companies may take center stage. So far, the company generating the most buzz hasn't even filed for an IPO: social networking site Facebook, which has many betting its creation of a dual-class stock structure in November is a precursor to going public.
IPO market trackers say other popular online networking companies could soon offer shares to the public. Micro-blogging site Twitter and business networking site LinkedIn will likely follow if Facebook is well received. Restaurant review site Yelp and Internet telephone service Skype, which was sold by eBay Inc. to a group of private investors in November, could also join the line.
"Once Facebook makes that move, it will literally be pandemonium," said Scott Sweet, senior managing partner at IPO research firm IPO Boutique. "It will clear the way for everyone else."
As recently as six months ago, the IPO market had dried up as the economy worsened. But a flurry of debuts came in the second half of 2009 as confidence in stock markets grew.
In the past year, companies raised about $100 billion globally, and $22 billion in the United States, through initial public offerings of common stock. The amount raised in the U.S. is about equal to the 2008 total, but that year, the majority of the money came from the $18 billion offering of credit card processor Visa. Both years combined still don't add up to the $59.7 billion collected in 2007.
In addition to the activity expected in the online networking universe, analysts predict that next year will bring a surge in filings as the economy strengthens and private equity firms invested in various companies continue to look for a profitable exit from their investments through an IPO or sale. There are already 95 companies in the IPO pipeline so far, compared with 63 public offerings this year. That's still less than a quarter of the 272 that went public in 2007.
Technology companies planning IPOs are getting the most attention, including Calix Networks, which provides communications systems and software; semiconductor company Telegent Systems; Newegg.com, an online-only retailer that sells computer hardware, software and consumer electronics; and online marketing company QuinStreet.
Also driving the IPO market are deals from Asia, which is enjoying stronger economy and a resurgence in investment. Companies there have clean balance sheets and earnings that are stronger than many debt-heavy U.S. firms. Offerings on exchanges in Hong Kong and mainland China have raised about twice as much as U.S. IPOs in 2009.
