As IPOs lose luster on U.S. markets, will Tampa Bay lose part of its job machine?
Wake up and good morning. Good insight from the Wall Street Journal this morning with a piece that should resonate here in Florida. Here's the crux of it:
"A combination of mergers, fewer U.S. IPOs, lower listing costs abroad and a shift in how investors and stockbrokers do their jobs has driven down the number of U.S. stock listings by a startling 43% since the peak in 1997 -- all during a period when the number of listings outside the U.S. has more than doubled. The result is some 3,800 fewer companies trade on the U.S. exchanges today than in 1997, according to consulting firm Capital Markets Advisory Partners. Abroad, there are nearly eight times as many listings as in the U.S., with Hong Kong, China and India among the leading venues."
The point? "We're losing the ecosystem that has helped buoy the U.S. economy over decades," Kate Mitchell, co-founder of Scale Venture Partners, a Silicon Valley venture-capital firm, told the WSJ.
This may seem silly at first glance, coming on the heels of the wildly enriching LinkedIn IPO. But that initial public offering is now more the exception than the rule.
Consider Tampa Bay public stocks. There are fewer and fewer of them. The latest to disappear is Clearwater's Technology Research Corp., a company that makes electric safety devices and was bought by a midwestern company. Poof. No more public company here trading under the ticker TRCI. Now it's a subsidiary of Coleman Cable.
There are other examples. Outback Steakhouse? Gone as a public company, and now operating privately as OSI Restaurant Partners in Tampa. Catalina Marketing? Once public, gone private. Paradyne? Once public, bought by Zhone Technologies.
With the exception of TV/online retailer HSN in St. Petersburg, which was spun off and became public several years ago, there's not much to boast about around here in the world of IPOs.
On the other hand, Tampa Bay-based public companies like Tech Data Corp., Jabil Circuit and Lincare -- whoppers by regional standards -- are on a Barron's list as possible takeover targets. That would be startling to the region if either one simply became some unit of a distant company.
One big implication is that "taking a company public" -- at least in this country, on a U.S. stock exchange -- is losing favor. Says the WSJ: "Today only about 15% of start-up companies backed by venture-capital firms eventually go public, compared with more than 90% in the early 1980s, according to the National Venture Capital Association. The WSJ quotes IPO guru Jay Ritter (photo, left), a professor of finance at the University of Florida: "Companies going public have generated a lot of jobs and economic growth. The prolonged drought in IPOs [in the U.S.] raises concerns about whether an important engine of growth in the U.S. economy has come to an end."
Times are changing. Fast. We've seen a clear shrinkage of publicly traded companies based in Tampa Bay.
Is this a concern?
Does it hurt our local economy? Does it diminish our jobs machine?
Are we losing economic visibility? A public identity?
(Wall Street bull: AP photo)
-- Robert Trigaux, Business Columnist, St. Petersburg Times