Where Have the IPOs Gone?

At a meeting with a Top 10 investment bank, I asked the head trader about the sad state of IPOs. With the exception of Facebook's exclusive deal with Goldman Sachs, is there any other American company that could go public and create that type of excitement?

He didn't have an answer. I mentioned General Motors. In case you've forgotten GM went public last month and raised some cash that was paid back to the US government. While getting GM back on its feet is a good thing and will help US jobs, it's not the sexiest IPO out there. At the end of the day, owning GM stock is about as exciting as owning a GM car.

Facebook is different. It's exciting, young, and the company is flush with cash. According to new reports it is loaded with revenue of about $2 billion with roughly $400 million in profit. Who wouldn't want a piece of that?

Well, if you haven't forgotten the 90s, then you might want to take a breather. Two decades ago -- and yes, it is odd to type that -- people thought America Online and CompuServe were here to stay. No one would venture out onto the web with a web browser -- they needed the protection of AOL to dip their toes in the online waters. Back then people worried about privacy and entering their credit cards online. Now people post their whereabouts and purchase tickets, clothing and anything else without giving it much of a thought.

Habits change -- and so do the hot Internet properties. Facebook, once it goes public, will have to innovate like mad in order to justify its insanely high valuation. What's next? Do they have a VIP Facebook where you are friends with people you truly want to befriend? (I could use this as I dread every time one of my 12 year-old's friends ask to "friend" me on Facebook. Sorry darling, but this is rather creepy.) How about a FB Swap site? If my pal has an old drum set, maybe I can trade some yard work or an old exercise bike for them.

In the meantime we'll have to wait for the Twitter IPO to regain that public offering mojo. Now there is something that won't look silly in a few decades.

Editor's Note: You can follow me on Twitter at @philalbinus, where I am the author of 4,725 tweets. Pathetic, huh? Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining Advanced Trading, he served as editor of Waters, a monthly trade journal ... View Full Bio