By Allan Maurer
NEW YORK—The success of Mead Johnson’s initial public offering of stock Wednesday, the first on the American market in 12 weeks, is “A very positive move and an indicator that things may improve in the second half of 2009, but it’s only step one,” says Robert Power, vice president of the Global Corporate Client Group for NYSE Euronext.
But his advice to companies waiting for a larger IPO window to open is “Stick to your knitting and position yourself, but it’s going to be awhile.”
The success of the Mead Johnson IPO, however, which priced at the high end of its range and increased the number of shares offered, led to excitement on the trading floor “like the old days,” says Power. “It signals that companies with good, solid stories will get out this year.”
Nevertheless, he adds, “We still anticipate it’s going to be rough sledding through the first half of the year until we get more stability in the markets. The unprecendented volatility of the markets in the fourth quarter of 2008 was unlike anything seen since the 1930s, he says.
The volatility has stabilized somewhat, falling to half what it was in the fourth quarter, which Power says is “A really positive sign.”
Still, he says, “We see the first half of the year as being more or less like what we see now.”
Power is one of 40 speakers who will participate in TechJournal South’s third annual Southeast Venture Conference March 11-12th, 2009 at the Intercontinental Buckhead in Atlanta, Georgia (see: www.seventure.org for more information or to register).
Power is responsible for new listings on the NYSE Arca, the NYSE Euronext, the holding company created by the combination of NYSE Group Inc. and Euronext N.V.
NYSE Euronext (NYSE/New York and Euronext/Paris: NYX) operates the world’s largest and most liquid exchange group.
“It’s going to be an interesting time between now and the SEVC conference in Atlanta,” he says, “because of all the interesting things going on in the general economy and how the markets will react to the different stimulus packages. The timing of the event is good for everyone to get out and talk about things. ”
Meanwhile, he suggests, “Look for benchmark signals, less volatility, companies like Mead Johnson getting out in a positive way. This is how you get out—baby steps that lead to regular steps. The big question is when is it going to be. We see this year as a transition. You have to walk before you can run. In another year, it could be a completely different situation.”
Power says that despite the economic downturn, “We’re staying busy. We’re going out and meeting with private companies, some who filed but put it on the back burner, some who haven’t filed, but did several rounds of venture capital and in a different environment would be public now, some who are working on IPO documents, so that when the markets turn, they’ll be able to take advantage of the window of opportunity.”
Power also points out that the NYSE Euronext exchange has loosened its listing standards to attract more venture-backed businesses.
“Historically only about one-third of IPOs would qualify for the NYSE,” he says. “We’ve adopted standards now that allow the next third to qualify out of the box. We still have higher standards than Nasdaq, but the new standards will allow more VC-backed companies to list with us.”
They’re talking with biotech, IT, and clean tech companies that have really good growth stories that set them apart from their peers, “Those that keep growing even in these crazy economic times,” says Power.
Power says companies with a good, solid story may even get positive IPOs out this year. Basically, though, he adds, “We’re confident we’re positioned well and we’re being patient.”
He notes that despite the dearth of positive IPOs last year, “It was a pretty active year for secondary offerings. Existing public companies were able to raise more capital. So there is some kind of appetite for new issues.”
Southeast Venture Conference, February 29 – March 1, 2012 at the Ritz Carlton in Tysons Corner, VA – Where Smart Money Meets Smart People.
www.seventure.org
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