The IPO market may be getting a boost from a surprising sector this year-technology.
Market watchers
say there was a noticeable uptick in technology IPOs in 2006 and, with
new technologies being introduced at a dizzying pace, that could
foreshadow a stronger rebound in 2007.
"Last year was the
first year in which we saw a rebound in technology" since 2000, says
Linda Killian, manager of Renaissance Capital's IPO Aftermarket Fund.
A surge in
technology IPOs would be a welcomed change among IPO investors, who are
still staggering from the technology crash of 2000.
That year
represented the high-water mark of the technology-driven IPO craze,
with 486 IPOs that raised about $97 billion. Since that time, the
highest amount raised by IPOs in any single year has been $43 billion,
which was achieved in 2004 and last year.
There were 199 IPOs in 2007, up from 2005, when 194 IPOs raised a total of about $34 billion.
The significant aspect of 2006 was the contribution of technology to the overall IPO market, Killian says.
Before 2000, she
notes, it was typical for technology issues to comprrise 25% to 40% of
all IPOs. Since the crash, technology has made up less than 10% of the
IPO market.
That changed in
2006, she says, with technology stocks-much of it in the form of
venture-backed technology IPOs-representing about 15% of the IPO market.
That trend could
continue in 2007, particularly with Microsoft expected to introduce its
new Vista computer operating system.
"We suspect a lot
of activity in 2007 that hasn't shown itself yet in technology because
of the introduction of Vista on a retail basis," Killian says. "It will
be one of the sectors to lead the way this year."