Why Are They Filing for IPOs?

For years, part of my morning newshounding has been to check www.SEC.gov for any new S-1 or RW filings. Basically looking for new IPO filings or withdrawals.Of late, however, I’ve only been searching for withdrawals, since new IPO filings seem to have gone the way of the dinosaur (or, perhaps, the way of completed IPOs). In fact, the last IPO filing from a VC-backed or PE-backed company had been Bridgepoint Education on December 22, 2008. Before that, you had to skip November to find a few October strays.

But could all that be changing? We’ve had two new filings since last Wednesday: One for Medidata Solutions, a VC-backed provider of electronic data capture and data management software for clinical researchers; and one for OpenTable, a VC-backed operator of an online network for restaurant reservations (which I happen to use, and love). It’s not exactly a flood, but relatively speaking…

The obvious question, of course, is why any such company would file right now. Sure their combined IPO dreams only total around $136 million — for contrast, MagnaChip today withdrew a $575 million offering — but it still takes time and money to go through the effort (including SOX compliance). Unfortunately, SEC “quiet period” rules prevent either company from directly answering the obvious question.

So I asked a VC involved with one of the two companies, and he told me that it was about being ready just in case the IPO window opens just a speck. Perhaps a two or three-week period in which the bulls prevail. “You don’t want to miss out because everything wasn’t in order,” he explained. “I obviously don’t think there’s going to be much of an IPO market this year, but that doesn’t mean there won’t be certain moments that we could take advantage of.”

Is that being a pragmatic optimist, or a rose-colored sucker? I guess only time will tell…