The Technology IPO Yearbook: 9th Edition – 23 Years of Tech Investing...


Our US technology team looks back at 23 years of US tech IPOs*
This report illustrates the good and bad of technology investing. We continue to believe that, in terms of IPOs and public market wealth creation, we’ve been through a period of feast (1995–2000) followed by a period of famine (2000–2003YTD) and are moving back to “normal.”

The déjà vu lessons of the Internet revolution
We launched this annual report series in 1994 to reflect on company creation and investing lessons of the PC revolution, post the Apple Computer IPO in 1980. We now have many of the déjà vu lessons of the Internet revolution, which we date back to the Netscape IPO in 1995.

Significant setbacks post-2000, but aggregate wealth creation remains significant
In the last 23 years, 1,720 technology companies have gone public, creating about $950 billion in public market wealth; they now carry an aggregate market value of $1.7 trillion, up 158% from IPO levels. Of these companies, 41 are “ten-baggers,” up 1,000%-plus.

Industry leaders account for a disproportionate share of wealth creation
About 2% of companies accounted for roughly 100% of net wealth creation. The greatest areas of wealth creation have been software, data networking, semiconductors, and services.

In 2001–02, the stage may have been reset for more tech wealth creation
Only 16 tech companies went public in 2002 and 19 in 2001, versus 221 in 2000 and 308 in 1999 (the annual average was 75 for 1980– 2002 and 61 for 1980–1998). About 50% of the 2002 IPOs and 44% of the 2001 IPOs had appreciated from their IPO market cap versus only 7% in 2000 and 16% in 1999 (the average was 48% for IPOs from 1980–1998 and 37% for 1980–2002). Data include acquired companies.

Industry Views
US Internet & PC Applications Software: Attractive; Wireless Infrastructure: Cautious; US Wireline Networking Equipment: Cautious; Enterprise Hardware/Storage: Cautious. Please see page 144 for our sector weights and more information on our industry views.

* All data, as of 12/31/02, are US-centric and refer to technology companies.


The Technology IPO Yearbook: 9th Edition – 23 Years of Tech Investing...