But wary investors have recently shown that even established public companies are not beneath their scorn. This should not have been a surprise to investors. Or consider Reston-based Nextel Communications. So not only will Nextel International raise less money than originally expected, it will give up more of the company to do so. Fred Burke, president of D.C.-based Johnston Lemon Asset Management, says both situations are emblematic of investors' mood these days.
People are just really scared of the market right now.
It is especially sobering to view these transactions in light of the euphoric mood of investors at this time last year. At that point, both XM and Nextel conceivably could have seen their stocks soar on such announcements. Speaking of fund-raising difficulties, it was a pretty lean fourth quarter for area venture capital firms. This is even more impressive considering the poor fourth quarter showing, and illustrates the ferocity with which money flowed into VC funds over the first three quarters of 2000. In a statement, NVCA and VE blame the slowdown on VCs who have raised significant capital over the past few years, and are now focused on investing it.