Many companies choose to delay their offerings when the stock markets are slumping, as they have been for the past few weeks. Investors who have been burned by the precipitous decline of well-known stocks, from Intel to Apple Computer or Yahoo to Amazon.com, become even more skeptical of new companies with no track record.
"I think (the overall market decline) makes it difficult for IPOs to justify their place in the market," said Randall Roth, an analyst with the IPO Plus Aftermarket Fund
Indeed, many companies that recently completed their debuts have posted relatively puny returns. The eight companies that began trading this week, for example, posted an average first-day gain of 16.8 percent, excluding those issues that began trading Friday, according to New York-based market research firm CommScan. This number falls below the 27.23 average since Sept. 1 and well short of the annual average of 55.5 percent.
Roth expects few strong performances among the technology lineup for next week. Cquential, he said, stands the best chance given its association with Arthur D. Little Consulting.
Cambridge, Mass.-based Cquential helps clients with mobile commerce and content distribution over digital networks. It is a spinoff of Arthur D. Little's Global Management Consulting business.
The company plans to raise as much as $109.5 million through the sale of 7.3 million shares at a range of $13 to $15.
In the six months ended June 30, 2000 Cquential earned $5.7 million on revenue of $62 million. Cquential has applied to trade on the Nasdaq under the ticker symbol "CQTL." Lehman Brothers will handle the sale.
Another company on next week's lineup is Aristotle International, which maintains a database of voters for political purposes. Aristotle plans to raise as much as $28 million through the sale of 2 million shares at a range of $10 to $14.
"With more and more scrutiny being paid to privacy, what they're doing kind of flies in the face of what people are concerned about, giving political parties and special interest groups a window into what you make, who you are, and what you want," Roth said.
The company has applied to trade on the Nasdaq under the ticker symbol "VOTE." WR Hambrecht will handle the sale.