The Debt Crisis Puts Future Tech IPOs In A Turbulent Market

Posted Aug 6, 2011

Some of the technology companies that have filed to have an IPO this year includes, Zynga, Groupon, and LivingSocial. Given Pandora and LinkedIn’s success on their recent IPO, it provided positivity and excitement for the aforementioned companies to go public. However today’s economy gives the stock market an entirely different perspective.

The United States has a weak economy and is facing a debt crisis. The United States had lost its top credit rating for the first time in history due to the debt crisis. This directly affects what happens on Wall Street.’s market valuation dropped below $100 billion and Apple’s stock price dropped below $400 again on July 26th. LinkedIn’s stock was recently downgraded as well.

Even though Wall Street is in a volatile state, the market is showing signs of strength. According to Renaissance Capital, the number of offerings is up 15% to 93. The proceeds have more than doubled to $28.5 billion. These offerings have grown due to many technology companies. Due to the strength of the recent technology IPOs, I believe that current economic conditions will not deter companies like Groupon, Zynga, Zillow, and LivingSocial to postpone. All of these companies have been successful in their respective market shares.