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 This week is shaping up to be the most active week in the IPO market for more than a year, but investors remain cautiously optimistic that the IPO drought has ended.Three companies have already gone public -- Medidata Solutions Inc. (NASDAQ:MDSO) debuted on Thursday, following Wednesday's IPOs by two Chinese companies, Chemspec International Ltd. (NYSE:CPC) and Duoyuan Global Water Inc. (NYSE:DGW) -- and another one, Invesco Mortgage Capital Inc. is likely to begin trading Friday under the ticker symbol IVR on the NYSE. (Subscribers to The Deal Pipeline can read more on Chemspec and Duoyuan here and on Medidata here.) The last time there was this much IPO activity was the week of April 21, 2008, when American Water Works Co. (NYSE:AWK), Intrepid Potash Inc. (NYSE:IPI), Hatteras Financial Corp. (NYSE:HTS) and Whiting USA Trust I (NYSE:WHX) all began trading. But investors reached Thursday are taking a wait-and-see view on the overall IPO market, expressing faith it will come back but not sure it has quite yet. "IPOs are a good sign most of the time," says Howard Lindzon, the co-founder of StockTwits. "I usually wait six months before looking." Joe ("JD") Donohue -- who among other past jobs was a retail broker for 13 years at Kidder Peabody, Smith Barney, Bear Stearns & Co. and Lehman Brothers Inc. and who has a following on StockTwits where he's known as @upsidetrader -- wants to see what will happen if there's more bad news. "How will these IPOs that come out of the gate over the last week or month react to more bad news?" asks Donohue. "IPOs that are venture-backed and technology-driven are the wave of the future. When the time is right, IPOs will be hotter and better than they were in 2000 and 2001." "The companies that are waiting to go public now are not like the companies of the late '90s," says David Hornik, a partner at August Capital Management LLC, whose new $650 million balanced-stage fund is the biggest venture capital fund raised this year. "These companies have tens of millions of dollars in revenue," says Hornik. "They're cash-flow-positive. They've built big businesses over the last decade. When they start coming to market, then we'll know we've at least turned a corner and are trying to make our way back up the hill." - Mary Kathleen Flynn
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