Sep. 13, 2012
Kenneth Guernsey
See more on Kenneth GuernseyCooley LLP San Francisco Corporate Specialties: business counseling, public offerings, mergers/acquisitions
The business climate is starting to show some signs of life, Guernsey said.
"We've been gradually clawing our way back from the Wall Street cataclysm of 2007 and 2008. But there is a lot of recovery to come, including with IPOs."
Guernsey and his team have been on a definite roll.
He guided San Francisco-based Zynga Inc. through the largest IPO involving a California company in 2011. The popular gaming site raised $1 billion when it went public in December and paid Cooley $3.2 million in legal fees.
At the same time, Guernsey led the recent IPO of consumer review site Yelp Inc., which paid the firm $1.2 million in legal fees.
IPOs for consumer-related companies such as these sites, Guernsey added, can pose special challenges.
"You've got an intense interest in the company coming from their users," he said. "You're trying to explain to the investment community why a business model is good for them, because it does a good job of extracting dollars from customers. And at the same time, you've got all of your customers reading that same document and realizing it's their money being talked about. It creates an interesting dilemma."
With a large cross-section of the public involved, that can generate a wide range of reactions.
"In this social media-rich world we live in," Guernsey said, "every one of them will have a megaphone they can use to broadcast their own views."
Meanwhile, the rocky launch of Facebook Inc.'s IPO, which Guernsey didn't handle, hasn't seemed to discourage other businesses that are contemplating public offerings, he said.
Cooley's roster of pending IPOs, he said, "is as long as it's ever been, with more than 25 companies in process."
"The market is always cyclical, and you're always shooting at a moving target," he said. "What the conditions are today are always different in six months, so there is no point in putting it off, because the conditions are bad now. There'll be a different market at the end of the process."
Guernsey added, "History has shown that in general, companies that try to time the market often aren't successful, but those that have the courage of their convictions often find that it works out for them in the long run."
- PAT BRODERICK
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