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With IPOs Stumbling, Could Twilio's Spark a Resurgence?

By Steve Anderson
June 06, 2016

Ever since 2016 dawned, the market for initial public offerings (IPOs) of tech stocks has been largely quiet. It was enough to make some think that the whole year might be firmly lodged into the doldrums, at least until April arrived and with it SecureWorks' IPO. While that dazzled few, it could have been the start of something, and with Twilio about to launch its own IPO, a resurgence in the field may follow.

Twilio, a firm focused on cloud-based communications, has had no shortage of interested investors so far, having already raised nearly a quarter-billion dollars--$233 million—so far. Reports suggest the IPO could go live before the end of June, and those interested need only watch for the ticker symbol TWLO to carry on.

This year, reports note, has not been great for IPOs. It's the worst since 2009's catastrophic recession and the third worst since the dot-com era's days on the Earth. May, however, has been fairly exciting for IPOs so far, and represents the best month seen since October 2015, when the word “unicorn” was strong on many lips. May accounted for 16 IPOs by itself at a combined fundraising effort of $3 billion. Fantastic month by most any standard, but one that only bolsters an already slow year. Some might expect traders to take off in summer months, but that's not always so. IPOScoop's John E. Fitzgibbon noted that 27 percent of IPO trade over the last 16 years has taken place in summer months, so expecting traders to vacate desks may be a hollow expectation.

Plus, some of those vacations may take users out to Caesars Palace in Las Vegas July 18 – 21. For those travelers, the All About the API event is waiting to show off the latest in application programming interfaces (APIs). With a set of keynote speakers ready to talk about developments in the field, exhibitors ready to show off the goods, and a slate of hackathons planned to actually work on new projects at the show, the All About the API event could show the next big unicorn companies in the making.

The API market cannot generate big numbers every year. Eventually the market would be so crowded with new tech firms that there wouldn't be market enough to sustain them all, and many would drop out of the field. That would cast a pall of doubt over every future IPO—how do we know this isn't the next one to break down?—and hinder the entire market. So some years should be slow for IPOs, and this could be one of them.

Only September's arrival will tell the tale of the summer IPO trade, and only January 2017 will tell us about the year in IPO. There's a lot going on, make no mistake...and with a major show for APIs to come as well, it could be brisk business ahead for IPOs.

Edited by Stefania Viscusi

Contributing Writer

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