Prepared by Capital Hunter analysts:
It was a slow week in venture capital, with only 35 companies receiving $371 million, the lowest weekly total since early June. If you think the drop-off from last period (two weeks ago) is disconcerting, don’t fret. If you recall a few weeks ago we had a similar situation where venture capital investment tailed off, only to rebound strongly the following week. We expect this to happen again, as the early results so far this week (for our next newsletter) look promising. As funding results tend to be unstable (though admittedly not quite
this unstable) from week to week any cursory extrapolation of this period’s data would be deceptive, if not downright foolish. We expect monthly venture funding to remain around $2 billion, give or take a few hundred million, though the weekly volatility may remain the same in the coming weeks, but we doubt it. As for the specifics of this period, there is not a great deal of interest to report, but there were some things of note. The oddest occurrence was probably the relative financing equality between the various sectors this period. No one industry received more than 18% of the total venture capital this period (biotechnology), while six additional sectors, including media & entertainment and business services, received at least 10% of this week’s totals. Usually one or two sectors dominate, while the others receive a relatively minor pittance, though the winning sectors often change every week. Alternative energy companies were shut out this week, which we hope is not a sign of things to come. Oil prices have been coming down the past few months as crude now trades below $60 a barrel on the New York Mercantile Exchange. If you have kept up to date with venture capital the past three months you would have noticed a lot of money pouring into ethanol refineries and other related companies. Such companies need oil to stay high in order to be economically feasible, notwithstanding all of the subsidies and laws passed by the government to encourage ethanol production. We do not think that oil will stay below $60 for very long, but if it does ethanol companies and the private equity firms that funded them might have second thoughts. Only time will tell.
Initial public activity declined this period, with only four companies (though one, Western Union, is a spinoff from First Data) sniffing the public markets, down from seven two weeks ago. As there is much to be said about each of these entries in the interest of time I encourage you to click the Yahoo! Finance links below, as space is limited on our newsletter. On Yahoo! Finance you can browse through a gaggle of press releases, charts and any other pertinent information about the company that interests you. Without further ado, here are the public markets four newest companies:
Western Union
NYSE:WU priced at $422.4 million and is a provider of global money transfer services.
ViewPoint Financial Group
NASDAQ:VPFG priced at $100.9 million and is the holding company of ViewPoint Bank, a regional provider of banking services in Texas.
Breitburn Energy Partners LP
NASDAQ:BBEP priced at $111 million and ia an independent oil & gas partnership focused on the acquisition, exploitation and development of oil and gas properties.
Danaos Corp.
NYSE:DAC priced at $215.3 million and is a provider of shipping services to the world’s largest liner companies.
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