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IPO's Falling Victim to Market Decline

August 09, 2011

August 9, 2011 (Mountain View, CA) – Horace Nash, Co-Chair of the Securities Group with Fenwick & West, was recently quoted in the Daily Journal article "IPOs Falling Victim to Market Decline," as well as The Recorder article "Stock Market Casts Shadow on IPO Pipeline."

Both articles addressed the recent stock market plunge and the impact of this decline on start-ups looking to go public. Companies have begun to pull back their IPO plans in the wake of the downfall, with a steep drop off expected if the economic outlook does not improve soon.

Mr. Nash was quoted in the Daily Journal as saying, "If the only thing that happened was all stocks declined 10 percent, that would not be an issue for most transactions. It's not about prices, it's about uncertainty. Uncertainty drives investors to safe havens, and IPOs are not that."

He went on to say in The Recorder, "If stability isn't seen soon, it will probably cause those companies that were thinking about going public next year to reconsider their plans and perhaps postpone them all together."

"We saw this movie before when the tech bubble burst," Mr. Nash continued. "All of a sudden nobody knew what a tech company was worth. All the IPOs were on hold for a couple of years because investors didn't know how to value anything. And in 2008 and 2009, nobody knew what anything was worth.