That giant sucking sound on the US equity market

Contact: Brenon Daly

On the US equity markets Wednesday, it was one step forward, two steps back in terms of aggregate value of listed companies. As SolarWinds soared onto the NYSE, creating more than $800m of market value early in the day, Data Domain got picked up by storage rival NetApp. That deal, which is slated to close this summer, will erase some $1.75bn from the Nasdaq. That’s twice the amount added by SolarWinds.

Wednesday’s net outflow continues a long-running trend of a declining number of tech listings on the US public markets. Consider that since the last tech IPO (Rackspace’s offering on August 8, 2008), acquisitions of more than 50 US public companies have been announced. The total amount of market capitalization erased in those deals: $33bn. Considered another way, we would need 40 more SolarWinds-sized offerings to make up the deficit.