Business Insight Zone

Overall condition of the IPO market: still torpid.

Relative condition of the IPO market so far this month: boffo.

Last week came the market debut of online gaming company Changyou.com. Today we’ve got the IPO of online college Bridgepoint Education. Overnight we expect to see the debut of language-learning software maker Rosetta Stone. That makes April the first month since last July with three IPOs on U.S. markets, and three is more IPOs than we’ve seen cumulatively since last Thanksgiving. (For more details, see our IPO Central.)

All of these are modest deals, which is probably appropriate, given the queasy feelings that the equity markets have been inducing in investors lately. But at least there’s more stability and some positive movement in the stock exchanges over the past few weeks. That’s a lot more welcoming to would-be IPO debutants than the nasty swings of late 2008 and early 2009 were. Unless you’re a juggernaut like Visa or Google, you want to come to the market when you’re sure investors are ready to give you a favorable hearing.

My guess is that the IPO market will continue to pick up bit by bit in the coming months, but I’d also bet that 2009 will still be the lowest year for IPOs — in terms of money raised, number of deals, or whatever — for many years.

Thinking about what I wrote the other day about the connection between the IPO market and the startup culture of Silicon Valley, I wonder whether we’re seeing a tectonic shift, such that most middle-of-the-road companies will be satisfied with a solid market debuts that make them viable public companies, rather than the sorts of rock-star IPOs that have driven the hype cycle (and lots of instant fortunes) in the past.

If the days of the glamour IPO are over, I, for one, will not mourn.

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Update, Thursday midday – Ben Steverman of BusinessWeek weighs in with this well-reported piece:

• Are IPOs Slowly Making a Comeback?

(Caveat lector: the article quotes me.)

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Related:

• FT: Diminutive debuts to test IPO water
• WSJ: Rosetta, Bridgepoint IPOs Heat Up Market for New Stocks

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Photo of a fascimile of the Rosetta Stone by Brett Weinstein, used under a CC-Share Alike license.

Category: Economics, IPOs