Turns out Minnesota's IPO machine is chugging along quite nicely. A year ago, local business observers were fretting that the state's supply of new companies, as measured by the number of firms completing initial public offerings, had all but dried up. By the second half of 1999, however, IPO activity began picking up and has really taken off in the new year. Four companies alone have announced plans for public offerings since Jan. 28. That IPO could hit the streets before the end of March.
Success breeds success, according to local investment banking professionals.
Still, they caution that a handful of prospective offerings occurring within a few weeks of one another does not necessarily constitute a trend, noting that most of the current registrations only signal the companies' intent to go public and that following through on those plans will be the real test. The answer also may be that the Twin Cities companies now gunning for IPOs simply are ready to move to their next level of growth. After years of relying on internal revenues and private financings, the companies now need the added kick of a public stock to attract the kind of capital they need to compete with other high-flyers. It's a function of their business models. The stock market's recent volatility could be another underlying factor, prompting some executives of emerging firms to consider accelerating their IPO plans before the whims of the investing public shift once again.