I'm a growth-stock investor, and IPOs used to be my lifeblood. A steady pipeline of promising companies poised to jump into the market offers compelling ground-floor opportunities, assuming the valuations are reasonable.
Sadly, today's IPO market is rapidly collecting cobewebs. Instead of cheering on the market debuts of hot Internet companies such as Facebook or Twitter, I find myself struggling to stay awake. There's no way to tell how popular an IPO would be for much-visited sites like these two-- or LinkedIn, or perhaps Digg -- but the silence is deafening.
Infant-formula giant Mead-Johnson
Neither has been a dud. Priced at $24 and $12 per share in their respective debuts, Mead-Johnson and Grand Canyon Education both trade higher today.
Look back a few years, at more prolific dot-com IPOs such as Google
So what's holding Facebook back? And now that Twitter is gaining popularity in newsrooms, will it risk losing the buzz and settling for less?
Facebook's valuation has been a popular topic since the company turned down Yahoo!'s
Facebook and Twitter have had no problem squaring away venture capital money, so it's not as if there's a dire need for either company to go public. However, I will argue that a moribund market for growth stocks needs an IPO like Facebook, Twitter, or China's Taobao to breathe new life into the system.
Cynics would argue that the companies should wait until the climate improves, but what if their IPOs are the catalysts the market is waiting for? As in the good old days, the companies can always come back with secondary offerings at higher prices if sentiment improves.
So what are you waiting for? Update your status to "… is going public," Facebook. Twitter, it's trick or tweet time. The market needs you.
Some cool widgets for your Facebook profile: