Volatility and a general downward trend in the Nasdaq in recent weeks have spilled into the market for initial public offerings. Several companies delayed their IPOs this week, while others pegged their debut price more conservatively in relationship to their peers.
Of the 14 companies scheduled to begin trading on Wall Street next week, five are holdovers from last week, according to Renaissance Capital, which operates the IPO Plus Aftermarket Fund.
The much-anticipated IPO
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Market experts say investor pessimism for Nasdaq companies and the broader markets has sapped enthusiasm for IPOs.
"IPOs are not a disconnected event," said Kathleen Smith, a fund manager with the IPO Plus Aftermarket Fund. "It's so much easier to price an IPO when the market is heading upward, because no one wants their deal to fall below the offering price."
David Menlow, president of the IPO Financial Network, said jitters in the broader market were making it more difficult for companies to sustain themselves in the aftermarket.
"In a market that is slowly unraveling in front of our eyes, it is difficult to mount a convincing case why people should be aggressive in the aftermarket," Menlow said.
Despite these precautions, several companies are expected to brave the market with IPOs in the upcoming week.
Analysts are placing strong bets on Synplicity. The Sunnyvale, Calif.-based company makes software for the design and verification of semiconductors used in Internet infrastructure hardware, including next-generation networking and communications equipment.
Synplicity's customers include Alcatel, Siemens, Cisco Systems, Nokia and Lucent Technologies. For the six months ended June 30, the company lost $2.9 million on revenue of $13.8 million.
"A company like this can generate high profit margins," Smith said. "They have solid customers, and profits are near term."
Synplicity plans to raise $51.6 million through the sale of 4.3 million shares at a range of $10 to $12. The company has applied to trade on the Nasdaq under the ticker symbol "SYNP." Robertson Stephens will handle the sale.
Alisa Yaffa, 36, and her spouse, Kenneth McElvain, 40, founded the company and together own 58 percent of Synplicity, according to Hoovers.
For the six months ended June 30, the company lost $130,000 on $46 million in sales. Customers include Lucent, Ericsson and Agilent Technologies.
"We have it on our hot list," Menlow said. "The company seems like it's just on the verge of profitability. It may happen this year. They've been close."
Co-founders Michael Endres and David Meuse each own 13 percent of MCE; CEO John L. Smucker owns 17 percent, according to the company's filing with the Securities and Exchange Commission.
MCE plans to raise $132 million through the sale of 8.8 million shares at a range of $13 to $15. The company has applied to trade on the Nasdaq under the ticker symbol "MCEI." Deutsche Banc Alex Brown will handle the sale.