The reason there will be extended period of inaction in the IPO marketplace is because of the risk associated with underwriting an IPO. In the past institutional investors, hedge funds and money managers were the major purchasers of IPO’s. Matter of fact individual investors were shut out of the IPO marketplace because of the lucrative returns institutional investors received for their short lived investment. It was not uncommon for a few well-healed (rich) clients of institutional firms to make a killing on an IPO within hours after it started to trade. The same people that locked out the small investor in the past now want no part of the IPO marketplace.

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Other posts of the serie

  1. IPO Landscape for 2009 – Part 1 - February 11, 2009
  2. IPO Landscape for 2009 – Part 2 (This post) - February 12, 2009
  3. IPO Landscape 2009 – Part 3 - February 13, 2009
  4. IPO Landscape for 2009 – Part 4 - February 14, 2009
  5. IPO Landscape for 2009 – Part 5 - February 16, 2009
  6. IPO Landscape for 2009 – Part 6 - February 17, 2009
  7. IPO Landscape for 2009 – Part 7 - February 18, 2009
  8. IPO Landscape for 2009 – Part 8 - February 19, 2009
  9. IPO Landscape for 2009 – Part 9 - February 20, 2009