Today: After last week's jaw-dropping rise for two Silicon Valley tech IPOs, Friday's trio of offerings -- RingCentral, Violin Memory and Pattern Energy -- bring the market back to earth.
The Lead: Three more Silicon Valley initial public offerings, three different results
After Rocket Fuel and FireEye priced their initial public offerings well above their initial proposed ranges last week, but still saw their stock prices skyrocket on the first day of public trading, talk of a possible new bubble forming around Silicon Valley technology IPOs began to pop up.
Wall Street's answer on Friday: Nope.
Three Bay Area companies debuted on the public markets Friday, and all three experienced different results, none of which mirrored the jaw-dropping rise of Milpitas-based FireEye or Redwood City's Rocket Fuel. San Mateo cloud-communications company RingCentral had the biggest first-day rise, 40 percent, after pricing its shares at the top of its proposed range and pulling in just shy of $100 million. San Francisco-based wind-energy company Pattern Energy had the largest total windfall, at $318.6 million, and saw its shares gain 5.8 percent after commanding $22 apiece; and Violin Memory never crested $8 a share in public trading after selling 16 million shares at $9 apiece, closing with a decline of 22 percent.
"The market goes up, it goes down," Violin CEO Don Basile explained in an interview from New York. "We just have to keep executing, and the investors will understand the value of enterprise storage."
The market for technology IPOs is in razor-sharp focus because of two highly anticipated upcoming debuts, Twitter and Alibaba. San Francisco microblogging service Twitter announced in early September that it had filed confidentially for the biggest social-media IPO since Facebook, while Alibaba signaled earlier this week that it would move its debut to the United States, where it has a chance of breaking Facebook's record for valuation of a tech company at IPO time.
With the action of the past two weeks -- created when seven Bay Area companies filed to go public in August, ahead of Twitter's announcement -- the vision that begins to take shape is of a market focused on enterprise cloud-software companies. Friday's biggest gainer, RingCentral, claims that sector, as do FireEye and Rocket Fuel.
"I don't think we're in a bubble." Manuel Henriquez, who runs a Palo Alto tech investment firm called Hercules Capital, told Mercury News reporter Peter Delevett on Friday, later adding, "I think there are certainly valuation bubbles in certain sectors."
Though Twitter and Alibaba are not cloud-software companies, that won't stop them from raking in millions when they decide to enter the market, expected before the end of the year, because both are widely known brands in their target markets and even worldwide.
"Brand recognition will always foster additional attraction," Scott Sweet, a senior managing partner at IPO Boutique, told the Associated Press.
Other companies that focus more on consumers than businesses are also lining up to join them, with the maker of mobile games including Candy Crush Saga, King, filing for a U.S. IPO, according to a Friday report. After an even dozen companies debuted on Wall Street this week, another handful are lined up for next week, though no Silicon Valley tech IPOs are believed to be on the schedule.
SV150 market report: Wall Street stumbles again
Wall Street's respite on Thursday from falling stock prices didn't last long, as all three major U.S. stock indexes declined Friday for the sixth session out of the past seven. Silicon Valley tech stocks couldn't avoid Friday's weakness, with strong gains from Facebook and Yahoo (YHOO) more than offset by widespread weakness in the SV150's largest companies.
Yahoo closed higher than $33 for the first time since Microsoft offered that per-share amount in a takeover attempt five years ago, gaining 2.4 percent to $33.55. The Sunnyvale Internet company, which owns more than 20 percent of Alibaba, voiced support for the company's management structure, the basis for Alibaba's move from an IPO in Hong Kong to one in the United States. Facebook topped $51 a share for the first time, gaining 1.7 percent to $51.24 as the Menlo Park company announced that it is still trying to fine-tune its system for providing relevant ads to its users. Facebook also added to its fast-growing tally of positive analyst notes, with Deutsche Bank analyst Ross Sandler reiterating a "Buy rating" and raising his price target from $43 to $62 on belief in "Facebook's ascendancy in mobile."
The SV150 declined 0.5 percent on the day, however, as the seven largest valley tech companies in terms of revenue all declined. Apple (AAPL), the world's most valuable company, dropped 0.7 percent to $482.75 after being targeted for scorn by none other than Martha Stewart; Hewlett-Packard (HPQ), which severed its contract with Violin last year, fell 0.6 percent to $21.17; Intel (INTC) fell 1.8 percent to $22.98 amid reports that it is seeking a partner for its TV effort and may be forced to scuttle the project if it fails; Google (GOOG) fell 0.2 percent to $876.39 while facing more recriminations from Europe; Cisco (CSCO) declined 1.9 percent to $23.33; Oracle (ORCL) fell 0.1 percent to $33.78 as an investor called out CEO Larry Ellison for his large pay package; and eBay (EBAY) fell 1.5 percent to $55.78 after Thursday's acquisition-driven gains.
Down: LinkedIn, Cisco, Intel, Salesforce, eBay, VMware, Symantec, NetApp, Juniper, Applied Materials, Workday, EA, Apple, HP, Yelp
The SV150 index of Silicon Valley's largest tech companies: Down 6.27, or 0.46 percent, to 1,343.5
The tech-heavy Nasdaq composite index: Down 5.84, or 0.15 percent, to 3,781.59
The blue chip Dow Jones industrial average: Down 70.06, or 0.46 percent, to 15,258.24
And the widely watched Standard & Poor's 500 index: Down 6.92, or 0.41 percent, to 1,691.75
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.