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Wall Street Snapping Up Losers
Tech companies with no profits are enjoying hot IPOs again
By Peter Fearon
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Posted Mar 28, 07 9:46 AM CDT
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(Newser)
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Money-losing tech companies are enjoying overheated IPOs again. In a disconcerting echo of 1999, Forbes reports more than half the companies going public so far this year have yet to turn a profit. "The losers may be us," Quentin Hardy cautions, "a public suddenly so hot for growthy tech stocks that quality standards are starting to slip."
The share of moneylosing companies has risen dramatically in the last few months, Hardy observes. "In the last two years 392 companies went public, according to Renaissance Capital, and 71% of them were profitable. But so far this year only 39% of the 41 companies that have gone public have profits."