THE FUTURE NEW ENERGY IPOs
By
THE FUTURE NEW ENERGY IPOs
Andrew Caffrey, Staff, "Venture Firms Get Inside Track on IPOs Now," Wall Street Jrnl, 23 Nov 99, pg C1.
David Menlow, president, IPO Financial Network, complains that the venture capital firms who fund some of the start-ups (particularly Internet-related companies) also arrange to buy up most of the stock when an initial public offering is made. Then when the shares increase 200% to 500% immediately after the close of the IPO, the venture capital firm has the option of making quick returns on their investment. The article states, "It's all more evidence that the IPO market remains far more accessible to large institutional investors, despite efforts of some online brokerage firms recently to offer IPOs to the little guys."
A small group of "co-founders" are forming a corporation which is expected to become a new-energy mutual fund. This group is beginning, at the start, to make room for "the little guys" and gals. The idea behind this mutual fund is to provide the expertise and detailed knowledge of the new energy developments and the people involved to select the ones that appear most likely to succeed. In this way, the army of "little guys and gals" can invest in a broader range (spreading risk) of start-up companies. Hopefully, the same group will be invited to invest in the new-energy IPOs that will follow.
[Just a thought: The size of the Internet is an estimated $800 billion. The size of the energy market is from $3 to $5 trillion annually. What will be the reception by the stock market to new-energy IPOs? Ed.]
www.padrak.com/ine/NEN_6_13_2.html
Dec., 1999.