With dotcom companies continuing to hit the bankruptcy courts, many of the venture-backed companies that provided e-commerce networking and communications services are finding it virtually impossible to push their IPOs to market. So far, only two such deals have hit the public market, compared to the 13 that went public in 2000 and the 18 in 1999.
In February, Riverstone Networks (NNM:RSTN) raised approximately $120 million through its IPO. The Santa Clara, Calif.-based company, which provides Internet infrastructure equipment to service providers in the metropolitan area network, debuted Feb. 15 at $12 per share, but the stock had slipped to $9.06 per share by today’s market open. Backers of Riverstone included Silver Lake Partners, Charter Ventures, Integral Capital Partners, Benchmark Capital and Amerindo Investment Advisors.
Earlier this month, the much-anticipated IPO from Sunnyvale, Calif.-based LoudCloud Inc. (NNM:LDCL) fell short of expectations, as it was forced to lower its offering price to just $6 per share in preparation for its March 9 debut. It has hovered around that mark all month, with an opening price today of $5.34 per share. The company did manage, however, to raise $150 million from its IPO, in addition to its $145 million it received through three rounds of venture financing. The Internet services provider, founded by Netscape Communications founder Marc Andreessen, was also backed by Amerindo Investment Advisors and Benchmark Capital.
The $270 million raised via Internet communications venture-backed IPOs for the first quarter of this year is paltry in comparison to the $930.5 million raised through VC-backed IPOs during the first quarter of 2000, but is still more than the first quarter of 1999 when only $159 million was raised.
The largest offering in all of last year was the $408 million raised by Savvis Communications (NNM:SVVS), which debuted at $24 per share Feb. 14, 2000. The Reston, Va.-based provider of global data networking and Internet-related services has not performed as well since, plummeting to $0.53 per share as today’s market open.
In 1999, The largest amount raised from a VC-backed Internet communications company was MP3.com (NNM:MPPP), at $252 million. The San Diego-based online music file Web site entered the public market in July 1999 at $28 per share. As today’s market open, the company was only trading at $2.34.
Frank Musero can be contacted at