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Wall Street Beat: Market stokes tech IPOs, as Tableau and Marketo debut

Marc Ferranti and Joab Jackson | May 20, 2013
IPOs ride the market rise, but not all tech companies may benefit.

A strong stock market could open the floodgates for more tech IPOs in the wake of Friday's solid debut of Marketo and Tableau, but not all segments of IT may be able to ride the wave.

Marketo, which sells cloud-based marketing software, jumped 78 percent to close at US$23.10, up $10.10 from its opening on the Nasdaq. Tableau, a business intelligence and data visualization company trading under the eye-catching ticker "DATA", rose 64 percent to close at $50.75, up $19.75 from its opening on the New York Stock Exchange.

Tableau originally was set to offer 7.2 million shares but added another million shares thanks to an institutional investor that underwrote more of the float at the last moment. As a result, the company raised $254 million, rather than the $150 million it originally sought.

The promising debuts came as major markets and indexes rose for the fourth straight week, with the Dow Jones Industrial Average, the Standard and Poor's 500 and the tech-heavy Nasdaq exchange all closing up for the week. The Dow and the S&P have both hit nominal (not adjusted for inflation) record highs recently, having surpassed the milestone round figures of 15,000 and 1,600, respectively, three weeks ago.

Signs of a stronger jobs market and rising consumer confidence have helped fuel the rise in markets. On Friday, the Thomson Reuters/University of Michigan's preliminary reading on the overall index on consumer sentiment rose to 83.7, its highest level in nearly six years.

The Nasdaq has lagged behind the major indexes, but mainly as a result of weakness in Apple, which is a main component of the exchange.

Taking Apple out of the Nasdaq, it would be faring better than it is at the moment, said John Fitzgibbon, an IPO analyst who runs the IPOScoop website. "So how the market is doing more generally is more important right now."

Of the five tech companies in the Dow only Hewlett-Packard, with a strong exposure to the declining PC market, closed down Friday. The other tech stocks in the index -- IBM, Cisco, Intel and Microsoft -- all closed up. While Intel's fortunes have been tied to the PC market, analysts have applauded its recent moves to make chips for mobile devices, like Atom processors that are aimed at tablets.

Hit by tough competition from Android-based devices and plagued by doubts about its ability to continue to deliver hit products, Apple shares have flagged after hitting highs last year that made it, for a while, the biggest market capitalization (share value multiplied by number of outstanding shares) of any company in the word.

Nevertheless, even the Nasdaq has risen recently, and is at its highest point since 2000, as the dot-com boom started to go bust. The Nasdaq Computer Index, now up about 8 percent for the year, is starting to catch up to other indexes.


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