Many more tech companies about to debut are discounting their shares, and their valuations are growing more slowly, according to a Reuters analysis. Fred Katayama reports.
Fewer Silicon Valley firms may be celebrating IPOs. They're just not getting what they'd hoped to get. A Reuters analysis found that the percentage of tech companies this year that priced their public shares below or near their private market value has nearly doubled over last year. What's more, debutantes are finding that their public valuations are growing over their private market value at nearly half the rate they did last year. OpenView Venture Partners managing partner Adam Marcus said, "People are no longer out of their minds with valuations and expectations." That, bankers and analysts say, will force some companies to push back their plans to go public or pull out altogether. Just this week, supermarket chain Albertsons decided to delay its IPO, and sources say online lender Prosper Marketplace and data storage company Nutanix put off their plans to go public this year. And the year's biggest debutante, payment processor First Data, priced its shares at a discount, only to see them fall on its first day Thursday. Also this week: Twitter CEO Jack Dorsey's payments firm, Square, filed to go public. But experts expect it'll have to cut its price. .