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IPO Tech Market: A Riddle Wrapped in an Enigma

Quartz is reporting that cloud collaboration company, Box could make its IPO in “weeks, not months” as signs suggest that some confidence could be coming back to US tech stocks. Always a complex affair, tech stock movements have become yet more opaque in recent months, as analysts and investors seek to make sense of a sea of factors.

It was widely reported that Box had delayed its float on the back of a markdown in tech stocks recently, although the firm had never explicitly made a commitment to a debut date. Certainly there has been some market turbulence, however, as watchers have questioned whether cloud computing vendor valuations in particular had become overheated. Also, many suggest that the Edward Snowden revelations and subsequent news stories about the activities of the NSA are hurting sales for cloud and connectivity companies.

But the successful debut last month of Zendesk, a cloud-based servicedesk company profiled here, may point the way of an upturn in sentiment as companies like Arista Networks and MobileIron queue up their own floats.

The big IPO of the summer, Chinese e-commerce giant Alibaba Group, might actually serve to confuse the picture further as US analysts struggle to understand the full implications of a globalising technology and internet economy, or how some eastern companies might adapt to the rules and culture of western markets and ways of doing business.

The CEO of UK-headquartered document management company Mimecast recently suggested that the “frothy technology markets” might give pause for private companies pondering their next moves. Perhaps this patchy situation will lead to a little more conservatism when it comes to going public — and that might be no bad thing. The cryptic environment brings to mind Winston Churchill’s description of Russia as “a riddle wrapped in a mystery inside an enigma”. Or even the old TV sitcom Soap which featured the famous line, “Confused? You will be!”

 

Martin Veitch is Editorial Director at IDG Connect

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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