Thoughts about the PIPE Conference

I was thrilled to once again participate in a panel at this year’s DealFlow Media PIPE Conference last week at the New York Hilton. It does seem more and more that PIPEs and reverse mergers are more and more intertwined as businesses. It was also our firm’s pleasure to sponsor the event as well as one day’s luncheon.

My impressions of the mood of the attendees regarding the PIPE market: short term ain’t looking so good. Long term seems basically fine. As to reverse mergers – we are holding our own thank you, deal volume is roughly the same as last year, but fewer deals include a contemporaneous financing and those with financings are raising less money at lower valuations. And the deals are harder, taking longer and with greater uncertainty of closing.

As to PIPEs, they are a bit more cyclical than reverse mergers, but not that much. Now that we appear to be past the “deer in the headlights” period as I have called it, there is no fear of the economy and all its major financial institutions collapsing into a Depression, with runs on banks and the like. Public companies still need money. They will wait a bit when their stock price drops, but they can’t wait forever. Some funds are simply holding on new deals for the rest of the year. But some deals, albeit smaller ones, are getting done. And prospects for next year are not bad at all.

So my mantra of expect the worst and hope for the best remains. Now is the time to hunker down, tighten those belts, ride it out and take some strategic actions now if you can to position yourself for the coming upturn.

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