Allegro IPO Casualty Of Credit Pressure | New England sees no IPOs in first quarter
Allegro Microsystems Inc., of Worcester, recently decided not to pursue its initial public offering, reflecting a nationwide dearth of IPO activity so far this year.
“Since we filed our initial registration statement last August, the capital markets have experienced significant deterioration, leading us to conclude that this is not the best time to conduct our initial public offering. We will examine whether to proceed with our IPO when market conditions improve,” said Dennis H. Fitzgerald, Allegro’s president and CEO.
According to the National Venture Capital Association, an Arlington, Va.-based trade group for venture capital firms, there were no venture-backed IPOs in the U.S. during the second quarter of this year. A quarter with no IPO activity has not occurred since 1978, according to the association.
Dry Spell
And that follows a first quarter that saw only five venture-backed IPOs, none of which were in New England. Of those five companies, three were in California and two were in Florida.
This is in contrast to 2007, which saw a total of 86 IPOs, with 43 of them happening by June 30.
“Venture-backed companies that successfully enter the public markets represent a critical job creation engine for the United States economy, and that engine has completely shut down,” said Mark Heesen, NVCA president. “The lack of IPO activity may have serious economic implications. “We view this quarter ‘the canary in the coal mine,’” he said.
Lest it be thought that the sluggish IPO market is thought to be a result of just the ongoing mortgage credit crisis, a poll of over 660 venture capitalists found that 77 percent believed skittish investors were the reason, 64 percent blamed the mortgage and credit crunch while 57 percent held the Sarbanes Oxley regulation responsible.
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