VC-Backed IPOs Trading Below Cash

Ok, so we all know it’s an awful public market for growth technology and biotech companies. But the full force of just how awful didn’t quite hit home until this morning, when I repeated an exercise last performed as a tech reporter during the dotcom crash: Checking to see how many VC-backed companies that went public in the last two years are now trading below cash value. The answer: Lots.I just got through the B’s in my alphabetical order scan, and came up with three:

Authentec is profitable, has $62 million in cash, no debt, and a $42 million market cap, according to Yahoo Finance, which uses last quarterly figures.

Bioform Medical has $50 million in cash, $86,000 in debt, and a market cap of $37 million

Biodel has $92 million cash on hand, no debt, and a $58 million market cap.

Skipping down to the Gs I found perhaps the most dramatic crash-and-burn, Glu Mobile. Shares in the company, which peaked in July 2007 at over $14, now trades at a quarter each. The company’s got $21 million cash and a market cap around $7 million.

Last time I wrote about stocks trading below cash, sometime around 2001, I talked to a bunch of analysts who basically said the same thing: Buying below cash value should be a great deal, unless that cash stash is going in the wrong direction. As it turned out, most of those trading at-or-below cash companies did fizzle out, though a few recovered and gave back great returns. (Ask Jeeves, for example, went from a buck to over $20 after the market hit bottom.)

This time, the downturn means venture investors who held onto stakes in the companies they took public are probably looking at a lot of underwater holdings – yet another reason they’re not exactly clamoring to take new ones public.