Tech IPOs Opening Much Too Aggressively

It has been a pretty ugly time for tech IPOs lately. They've been pricing nearly every one above range still.

Sourcefire Inc. (FIRE): Currently trading 90 Xs '07 earnings, broke above range pricing, currently 18% above day 1 open.

Clearwire Corp. (CLWR): no '07 earnings, broke top of range pricing, and 25% below day 1 open.

Opnext Inc. (OPXT): Currently trading 80 Xs '07 earnings, has not broken top of range pricing and 1% below day 1 open.

Salary.com (SLRY): no '07 earnings, has not broken above range pricing, 15% below day 1 open.

Switch & Data Facilities Company Inc. (SDXC): no '07 earnings, not broken above range pricing (yet), 18% below day 1 open.

Mellanox Technologies Ltd. (MLNX): 40 Xs '07 earnings, has broken an above range pricing, 20% below day 1 open.

Isilon Systems Inc. (ISLN): no '07 earnings, has not broken an above range pricing, currently 20% below day 1 open.

DoubleTake Software Inc. (DBTK): 30 Xs '07 earnings, has broken top of range pricing, currently 4% above day 1 open.

Guidance Software Inc. (GUID): 110 Xs '07 estimates, has broken a below range pricing, currently 11% below day 1 open.

IPG Photonics Corp. (IPGP): Currently 30 Xs '07 estimates, has not broken above range pricing, currently 30% below day 1 open.

Netlist Inc. (NLST): currently 14 Xs '07 estimates, has broken a bottom of range pricing, currently trades flat with opening prints.

Optium Corp. (OPTM): 30 Xs '07 (untaxed) earnings, has not broken above range pricing currently 13% below open prints.

Acme Packet Inc. (APKT): 42 Xs '07 estimates, has not broken an above range pricing, currently flat with opening prints.

CommVault Systems Inc. (CVLT): 32 Xs '07 earnings, has not broken top of range pricing, slightly above opening prints.

DivX (DIVX): 45 Xs 07 earnings, has not broken an above range pricing, slightly above opening prints.

Riverbed Technology Inc. (RVBD): 90 Xs '07 earnings, has not broken an above range pricing, currently nearly 100% above opening prints.

Pretty eye-opening..... the take-away is: aggressive pricings and even more aggressive openings, no earnings or very high multiples, and overall a lot of money lost if buying and holding those opening prints.

They've simply been pricing and opening these tech ipos way too aggressively overall, since the success of RVBD/DIVX. It's been nothing short of a disaster overall ever since, for anyone eager to buy as soon as they open for trading on their first day.

Disclosure: http://www.tradingipos.com has no position in any of the above stocks at time of post. We may or may not take a position in any of the above stocks mentioned at some future time.

Comments

[Sr. Pessimist:]

Investors are desperate to find a new place to put their high-yield high-risk money. This reflects the lack of business development in America, where investors fight to dump their money in the next big thing.

2007 Mar 15 10:28 AM

[Totally a b...:]

And to the list today's IPO BBND - at current $17.xx price, the market cap is now 1 billion+ and PE is astrnomically high @ 150+ . Talk about the year 2000 bubble.

And I totally agree with Brian's comments above. People investing in this IPOs are just insanely crazy. They do not look at this numbers and are in a state of denial. Nor they look at the competition. For ex. our high-flier of the day BBND - its closest two competitors OpenTV (OPTV) and Terayon Communication Systems Inc. (Pink Sheets: TERN.PK) are both trading at $2.xx. They both provided equipments to Comcast and are being tested by Comcast for their new IPTV/VOD rollout. Why are they trading at this price if it is such a HOT market like BBND makes you believe.

Seriously guys, take a look at both OPTV and TERN, their financials and their website, their technology and products, they all look as good.

So please do not bet and dream that BBND will be your retirement nest egg.

2007 Mar 15 11:32 PM

[Totally a b...:]

And if BBND was so HOT, why was it not acquired all these years by giants likes CSCO or Nortel for whom $500-$700 million is pocket change.

2007 Mar 15 11:36 PM