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Cautious Optimism Greets Year Ahead.(A)

Investor's Business Daily

| January 02, 2003 | COPYRIGHT 2003 Investor's Business Daily, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Byline: MARILYN ALVA

Who will blink first?

That's the question hanging over the initial public offering market at the start of 2003.

Will sellers continue to hold out until valuations are higher? Will buyers let go of their fear and gamble on new issues?

The answers to such questions likely won't clear up until a couple of variables come into sharper focus, experts say. Those variables include a shaky but modestly improving economy, a murky regulatory environment and a war with Iraq.

It's a buyers' market, so issuers are at more of a disadvantage. They have to weigh whether it's better to go ahead with their IPOs or hold out until things improve.

"It's a question of how long they can wait," said David Menlow, president of IPOfinancial.com. "If the market does in fact get better, why sell your stock at 12 when you can sell at 18?"

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