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MEC (Mobile Edge Computing)

Could Market Volatility Hurt Tech IPOs?

The recent extreme dips and yaws of stock markets around the world could put a damper on plans by some tech startups to potentially go public.

The Dow Jones Industrial Average dipped more than 1,000 points in the first minutes of the market opening on Monday morning, recovering a little bit in the afternoon, with losses hovering around 450 points. The NASDAQ fell more than 400 points in the morning, pulling back to a 135 point loss by the afternoon. Wall Street followed European and Asian markets, which had already fallen, largely on concerns about the continued health of the Chinese economy. (See Money Problems.)

If such market volatility continues, it could put a damper on some IPO plans going forward.

So which companies have been talking about an initial public offering?

Independent mobile virtual network operator FreedomPop has been hinting that an IPO is one option for the fast-growing service provider, without directly saying it. The company's CEO said in June that the company had refused several buyout options and will revisit its "exit options" in 12 to 24 months. (See FreedomPop Grabs $30M More in Funding.)

Casa Systems Inc. has made no secret of its plans to IPO. The CEO of the company, Jerry Guo, told us about its offering plan in June, without talking about timing. (See Casa Systems Lines Up an IPO.)

Spanish operator Euskaltel has also said that it is considering an IPO. (See Euskaltel IPO Could Support M&A, 4G Rollout.)

Caribbean operator DigiCell has already filed initial IPO plans with the Securities and Exchange Commission (SEC) . (See Digicel Plans IPO to Fuel Growth.)


For more on mobile, visit the dedicated mobile section here on Light Reading.


Light Reading has heard, meanwhile, that both mobile virtualization startup Affirmed Networks Inc. and enterprise small cell specialist SpiderCloud Wireless are considering the possibility of IPOs. (See SpiderCloud Spins Web of Small Cell Partners .)

The tech IPO pipeline appeared to be getting much healthier through 2015 and going into 2016. As past stock market crashes have shown though, a weak market can put a damper on IPO plans.

If the huge dips in the Dow are not simply a correction to a stock market that has been on a roll over the last four years, however, IPOs may be the least of our worries. Investors are certainly concerned: the Chicago Board Options Exchange (CBOE) Volatility Index, otherwise known as the "investor fear gauge," concerning stock market volatility over the next 30 days, is up nearly 50% today.

— Dan Jones, Mobile Editor, Light Reading

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DanJones 8/24/2015 | 6:08:36 PM
Know of more IPOs? Anyone know of any more planned IPOs out there?
DanJones 8/25/2015 | 5:45:47 PM
Market down again today. Wall Street is down again today despite Chinese interest rate cuts. The market slid in the last minutes of trading Tuesday.
MikeP688 8/26/2015 | 12:17:54 AM
It has been "brutal".... China "apparently" stabilized at it opened this morning after the carnage.   But look at Twitter and Alibaba (and the correction in Apple) should lead all to pause.   The crazy valuations out there are just beyond the pale.  Although I can't help but be jealous of the valuations of companies like BuzzFeed right now, for instance, after the investment by Comcast.
MikeP688 8/26/2015 | 12:26:15 AM
Re: Know of more IPOs? The one I'm eyeing is Square....I wonder if they'd pull it off.
DanJones 8/26/2015 | 5:29:43 PM
Re: Market down again today. Yeah, well, experience shows us that crazy inflated valuation bubbles do tend to burst eventually. Even if pundits say it will be different this time!
MikeP688 8/26/2015 | 7:18:25 PM
Re: Market down again today. As the old admonition goes, those who don't learn from history are bound to repeat it.   I had a chance to catch Jim Cramer on CNBC and can't believe how bullish he continues to be-but I also caught Charles Gasparini on Fox Business and he was noting how markets continue to be propped up by cheap money--which will continue with the Fed noting that the pledge to raise interest rates is not going to happen--and China just cut interest rates.

 

We're in for some rough seas. :-(
danielcawrey 8/28/2015 | 11:08:48 AM
Re: Know of more IPOs? I'm not familiar with most of these companies in the article but I'm sure they are all having an IPO anytime soon given market conditions. 

The Chinese stock market is a major concern. And it just shows how intertwined the global economy is these days since it has caused market disruption here in the US. 
DanJones 8/28/2015 | 1:51:46 PM
Re: Know of more IPOs? You mean not sure?
DanJones 9/2/2015 | 1:54:37 PM
Interesting related story On the Chinese stock market.
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