NYSE VP Robert Power calls the IPO market “a frozen tundra”

March 5th, 2009

RESEARCH TRIANGLE, NC – Robert Power, a VP at NYSE Euronext, speaking at a North Carolina Technology Association event, said the IPO market was froze solid the last two quarters, but “some ice is falling off the glacier.”

Power said that while “This is a touch cycle, it is a cycle.”

Power, who will also speak at TechJournal South’s Southeast Venture Conference March 11-12 at the International Buckhead in Atlanta (see: www.seventure.org to register), cited two positive signs amidst the current market turmoil.

He pointed to the Mead Johnson IPO, which priced at the high end of expectations, raised $700 million, and is trading higher than initial pricing. “It was a tremendous IPO,” said Power.

Power spoke at NCTA’s “When Will Technology Emerge From A Nuclear Winter?” event Wednesday.

He said a key to seeing the IPO market recover is more stability.

Current market volatility is setting records. “The Dow Jones Industrial average has gone up or down by 4 percent in one day 71 times since the 1950s,” he said.

In the fourth quarter of 2008, it managed a 4 percent daily change 31 times, nearly half that total.

He also said, at 16 months, “This is the longest Bear market since World War II.”

On the other hand, Power pointed out that secondary offerings have continued to perform well. “There is a lot of money on the sidelines,” he said.

To recover, the markets need a couple of quarters of significant stability, he said.

He quoted a Motley Fool analyst who said than once there is a more confident environment, “Investors will be looking for the babies thrown out with the bath water.”

Power also noted that venture capital backed companies are very important to the national economy, producing 10 million jobs and $7.5 trillion in revenue. IPO and merger and acquisition exits are extremely important to the VC industry.

He said the ratio of M&As to IPOs changed dramatically in 2008, with many more M&A deals than IPOs, “Although those slowed as well.”

In addition, Power mentioned that the NYSE is itself a “technology company selling software” that produces income on the same level as its listing services.