Initial Public Offerings

#1

Fluidigm made the decision to expand their company and in order to raise the capital on April 2008, Fluidigm filed with the Securities Exchange Commission (SEC) to become a public company and trade on NASDAQ. The company had hoped to raise $80 million in the Initial Public Offering (IPO) and had priced the shares at $14 to $16 a share. On the first day of trading on September 5, 2008, not all went as planned for this venture backed company. “The week that Fluidigm hoped to go public was one of the most tumultuous in market history, with Lehman Brothers’ bankruptcy, the sale of Merrill Lynch, and a freezing of the credit markets” (Miller, 2008). By week three, Fluidigm withdrew their IPO registration because the stock market was too unpredictable and with the financial crisis of 2008, investors were too leery to invest in a bio-tech company even though the company had $32 million in cash at the end of June. The concern was the company could run out of money by 2009 because they were burning capital at a rate of $6 to $7 million per quarter and the company’s focus was to grow the business, not make cuts. Fluidigm believed that they would have done well if the stability were there in the market. According to Miller (2008), if Fluidigm had not withdrawn their IPO, “they would have only been the seventh venture-backed company to go public in 2008 in comparison to 86 that went public in 2007 according to National Venture Capital Association”. In February 2011, Fluidigm made their second IPO attempt and on their first day, their pricing went from $13.50 to $14.37, a 6.4 percent increase, which was a completely better experience than their first IPO attempt in 2008 where the pricing fell to single digits. As of November 29, 20...

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...ying for an IPO is currently very difficult but if there was a requirement in how many investors a company had to have before an IPO date was set and to help spread the risks of the investment banks could help the company know ahead of time how well the IPO will go once the stock goes public and to help limit the liability of the investment banks.

References

Miller, C. (2008). Fluidigm Gives on Going Public. Downloaded from the World Wide Web November 30, 2013 from http://bits.blogs.nytimes.com/2008/09/26/fluidigm-gives-up-on-going-public/?_r=0

Koba, M. (2013). Initial Public Offering: CNBC Explains. Downloaded from the World Wide Web November 30, 2013 from http://www.cnbc.com/id/47099278

Chatterjee, R. (2008). Ice in The Valley. Business. Downloaded from the World Wide Web November 30, 2013 from http://business.outlookindia.com/printarticle.aspx?101755