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Bear market puts lid on IPOs, secondary offerings

As the tech-heavy Nasdaq enters a bear market, down more 37 percent from its high, companies are shying away from initial and secondary public offerings.

Web consultant Zefer (Nasdaq: ZEFR) announced the postponement of its debut Friday, leaving the IPO slate blank on what is usually the most active day for initial public offerings. After one-third of last month's IPOs were broken, or fell below the initial price, more than 5 issues were postponed this week.

"When things begin to go south, companies with no clear leadership position suffer. Investors become picky," said Randall Roth, analyst for Renaissance Capital.

Even in a hot area such as wireless, "there can only be so many winners," Roth said. While companies like AT&T's wireless spin-off (Proposed ticker: AWE) will do well no matter what the market does, second-runners could be on the razor's edge

After lowering their price ranges earlier in the week, two biotechs, pain management firm, Adolor (Nasdaq: ADLR) and Rigel Pharmaceuticals (Nasdaq: RIGL), both decided it was better to just call the whole thing off. Drug Abuse Sciences (Nasdaq: DASI) also postponed its IPO due to market conditions.

Among techs, FloNetwork, (Nasdaq: FNWK) and (Nasdaq: CSAV) both postponed their IPOs, and those that did go to market this week had a decidedly desperate tone. Corillian (Nasdaq: CORI) just managed to stay above water. (Nasdaq: IASIA) and (Nasdaq: SINA) managed to eke out gains, but their performance was far beneath what should be expected from offerings with the magic word "China" attached to them.

Of the week's more promising offerings, Bookham technology (Nasdaq: BKHMV) made it successfully out the door, while PEC Solutions (Nasdaq: PECS) , a provider of Internet services for government main frame systems, decreased its price range to $10 to $12, from $12 to $14, and then fell off the calendar. Nuance Communications (Nasdaq: NUAN), which makes voice integration software, surged in its debut Thursday.

Among offerings that are willing and able to withstand the harsh conditions, AltaVista (Proposed ticker: ALTA), which counts Compaq (NYSE: CPQ) and CMGI (Nasdaq: CMGI) as shareholders, and AT&T Wireless still could make strong debuts.

"The cream is still rising," said Kenan Pollack, analyst for IPO Central. He also said the debut of Divine InterVentures (Proposed ticker: DVIN)is one to watch.

And its not just the IPO market hitting the skids. Secondary offerings have also been postponed. Internet marketing firm Modem Media Poppe Tyson Inc'(Nasdaq: MMPT), Network Access Solutions Corp. (Nasdaq: NASC), which sells telecommunications equipment, as well as and Interlink Electronics all postponed their secondary offerings. Inc. (Nasdaq: SQST), which a business-to-business e-marketplace for scientific products, said in a statement that "neither the company nor many of the selling shareholders desire to sell shares at the current price levels." The company said it will continue to evaluate the situation as market conditions change.

Sciquest remains "confident of its prospects for growth and does not need additional capital at the present time or in the foreseeable future," said CEO M. Scott Andrews in a statement.

Interactive remote control devices maker Interlink Electronics Inc. (Nasdaq: LINK) also issued a statement to reassure investors it has only postponed it offering until the market for technology stocks stabilizes. Interlink expects the waiting period to be brief, it added.