No IPO is garnering more attention right now than Facebook’s. Before that it was parade of Zynga, Groupon, Pandora and other major tech IPOs of the social media world. Companies like those are exciting, consumer-oriented and take up most of the tech headlines, leaving the business-focused tech companies in the dust.
But of the two, which group is performing better in the market?
We started tracking the IPO market in-depth starting last year. Since then, the average return on every tech-enterprise IPO is more than 50%. In contrast, consumer tech IPOs are averaging a loss of more than 6%. On top of that, the enterprise class on average not only starts trading higher, but also actually grows its return within the first few months of trading. Consumer-focused tech seems to be the exact opposite, with few exceptions.
There’s no doubt Facebook will be big. But if we want to talk about which companies will be the technology pioneers of the future, we may be looking in the wrong place.
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