According to a recent report by the Wall Street Journal, the tech IPO market is hot again.
(1888PressRelease) March 31, 2014 - In early March 2014, the Wall Street Journal gave a rundown of what has been a very hot technology IPO market. The Journal reported that there were 42 listings globally in the first two months of 2014, compared to 20 from the same timeframe in 2013, and keep in mind 2013 was a very good year for IPOs.
The impact of IPOs on the market as a whole is an important dynamic to understand. One part of the equation is that IPOs represent the creation of new supply; supply of shares available for investment or speculation. During the buildup of the internet bubble which arguably started with Netscape in 1995, the supply of (internet) equities increased at a remarkable pace but demand increased at an even faster pace for almost five years.
As long as demand exceeds supply then prices are able to keep going up. Of course, eventually there comes a point where demand wanes for whatever reason which by itself is a drag on prices, and if more supply continues to be issued, like in the early 2000's, then prices are likely to fall.
Another building block of understanding of the IPO market is that companies prefer to sell at a high valuation not a low valuation. According to Seeking Alpha, there were 32 IPOs in 2008 and 63 in 2009 compared the 42 that listed in the first two months of this year.
The IPO bubble of 2000 happened in 2000, and the next time there is a huge market decline it won't be the same as the financial crisis of 2008. It will be something else, but assessing IPO enthusiasm can be useful nonetheless.
At any given moment, there is a list of bullish factors supporting the market and a list of bearish factors confronting it. When the IPO market is subdued, it serves as a bullish factor, whereas a hot IPO market serves as a bearish factor. There are no absolutes but enthusiasm for IPOs comes closer to the end than to the beginning of a bull market.
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Platinum Capital is a privately owned, boutique Investment Firm in the Private Equity market. The firm has a number of centres of excellence but primarily focuses on providing early stage funding to companies in both the Nanotechnology and Biotechnology sectors. Platinum Capital has lead or managed many successful Private Equity and Venture Capital investment projects across Asia and beyond, ranging from research projects on the applications of composite nano-materials to abnormality testing within the human gene pool.
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According to a recent report by the Wall Street Journal, the tech IPO market is hot again. 
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