Hot tech market hasn't gone away

If you assumed that the rock ’em, sock ’em market of the past few weeks is spurning Canada’s investment banks from launching tech offerings, you would be wrong. The success of Dragonwave’s (DWI:TSX) recent $43 million bought deal is serving to embolden the sell side. Although it was done at a 7% discount ($6.25/share) to the quote, that price was flat to the prior day’s close. Dragonwave’s offering was well oversubscribed, which was a happy outcome for their five dealer syndicate (only one bank in the group). All-in-all a nice move up from their $3.95 April IPO price. And the shares have traded well post deal, as did Sandvine (SVC:TSX).

With the buyside showing some confidence, too my surprise, it would appear that three tech IPOs might get launched before the end of the month. (Compare that to the situation at the moribund Bizarro AIMo market; see posts such as “Bizarro AIMo part 5“, June 14-07). One can assume that the fabulous Bridgewater Systems (see prior post “Is Bridgewater the next IPO?“, July 16-07) will be one of them. Bridgewater has raised over $41 million from RBC, VenGrowth, Newbury, Celtic, Eagle One and Covington. (Note to Ottawa-based voters: two of Bridgewater’s five VC investors are LSIFs, and two of Dragowave’s seven VCs were LSIFs; something that Premier McGuinty has inexplicably decided isn’t worth supporting).

MRM