Friday, 28 September 2007

SmartStream delays IPO

The difficulties with the IPO at SmartStream grow by the day. First the price range was cut significantly - from c£300m to under £200m now. Now the IPO itself has been delayed - possibly by only a few days (but who knows...)

I'll give Ian Spence the credit for alerting me on this one as I was a bit busy yesterday. You can read his new blog on this at Click here. As some of you might know, Ian was an analyst at 'Holway' in 1999/2000. I could blag that I taught him all he knows and that was why he went on to become Techmark Analyst of the Year but I doubt I'd get away with claiming all the credit!

On SmartStream, I repeat the comment I made on my earlier posts. IPOs are, and always have been, a good barometer of the industry as they test 'forward confidence'. They are not about past or even present performance or conditions. They are all about what investors believe will be the near/mid term outlook. Any look at a Holway IPO chart of the last 20 years shows peak IPO rates a year before growth rates crashes. Nadirs in IPO rates (particularly when measured by IPO 'pulled') are followed by 2 years of 'hard graft' for the sector.

But this conflicts with several reports (see previous posts) from other learned analysts who suggest that this time around "tech will be a safe haven in the wild storm". Again, as we reported before, so far this year tech has far out performed the general market. That is very unusual (indeed in my experience, unique) Normally tech amplifies the market - does verywell in good time, does appalling badly in poor times. There seems to be growing concern that we are in for a tough 2008. In the UK, with about a third of tech enterprise spending in the financial services sector, if that sector was hit badly tech just must suffer too. And will consumers still find money for the iPhone if they can't pay their mortgages?

In the past I'd be saying "just to be on the safe side, I think I'll keep my money in a building society". But you can't even trust them anymore!

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