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Peet’s Coffee & Tea Inc. is brewing up its initial public offering just as many other companies are putting theirs on ice. The IPO has a shot, says Cooley Godward partner Kenneth Guernsey. But given the sour market, the coffee company is the exception rather than the rule. “They’re looking ahead and anticipating that the holidays are a good time to be selling their stock,” Guernsey said. “Just like it’s a good time to sell their coffee.” What’s not selling these days are IPOs. In fact, 293 companies are backed up at the starting gate, stalled by an uncertain stock market. That’s nearly double the number of companies that were waiting in the wings this time last year, according to Thomson Financial Securities Data, a Newark, N.J.-based market data company. The would-be new issues also face a time crunch. There are just 45 trading days left in the market before Wall Streeters formally shut down for the holidays. And realistically speaking, even fewer workdays are likely between now and the holidays because most deal activity stops in early December. If the market were more deal friendly, “two-thirds of the backlog would be frantic to get out in the next six weeks,” said Fenwick & West partner Daniel Winnike. However, “there’s less [IPO] activity among companies that have filed in the past few months,” he said. Of course, that doesn’t mean corporate lawyers have nothing to do. Instead, the companies are still trying to scare up more private investment capital. Or they’re trying to get bought. Some are even rethinking their financial controls and calling in their lawyers to help in order to woo investors. Nevertheless, it’s a tough time all around. “Given the fragility of our marketplace we should probably consider augmenting our traditional legal fees with compensation for psychiatric analysis,” quipped Jeffrey Saper, a Wilson Sonsini Goodrich & Rosati partner. Saper has seen about half his would-be IPO clients ditch the process, and the other half begin searching for more investment capital. What has the companies backed up at the gate is an inhospitable Nasdaq, the market of choice for most technology issues. The Nasdaq started falling in April from a high of above 5,000, and earlier this month it hit a new low for the year at 3,100 points. It’s been driven down lately by earnings disappointments, rising oil prices, and violence in the Middle East. “It’s not a good market for IPOs,” said one San Francisco IPO investment banker who spoke on the condition of anonymity. People are still funneling new cash into mutual funds, the largest buyers of IPOs, but the fund managers aren’t using it to buy stock at the pace they have in recent years, the banker said. He added that many of the companies languishing in the pipe aren’t considered live deals. Instead, the offering may still exist but the company has given up and is seeking other financing options or just waiting to get bought. That’s been the case for a number of Fenwick clients whose IPOs were withdrawn when the companies scored new rounds of venture capital, Winnike said. “Some clients recognize they can’t get out,” he said. That’s not to say all the news is bad. While one of Guernsey’s clients eyeing an IPO for this year hit the eject button last week, this week kicked off with a success. Endwave Corp., a Sunnyvale, Calif.-based maker of wireless system components, went public on Monday in the middle of its estimated price range. “In a hot market, it would be a big disappointment but in this market, it’s a huge win,” said Guernsey. “I don’t have anybody else in the process or talking about starting.” The companies that do continue to push through the process face diminished hopes, however. Said Richard Peterson, a Securities Data analyst: “Bankers and companies looking to complete deals in the next few weeks will be probably forced to trim their expectations.”

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