NEW YORK — A famous piece of rock ’n’ roll history has changed its tune about going public.
Fender Musical Instruments Corp., which produced guitars strummed by the likes of Buddy Holly and Eric Clapton and famously set on fire by Jimi Hendrix, said late Thursday that it dropped its plans for an initial public offering. The news came amid a handful of successful IPOs, prompting speculation about the reasoning behind Fender’s decision.
Fender CEO Larry Thomas said current market conditions and Europe’s ongoing economic woes wouldn’t support an IPO that values the company appropriately.
Industry observers said that while there may be some truth to that, Fender’s reasons may have more to do with the different growth prospects between Fender and the technology companies that have recently gone public than the current IPO environment.
The Scottsdale, Ariz.-based company, which sells its guitars in 85 countries, originally filed papers for its offering in March and set a price range of $13 to $15 per share last week. At the time of its original filing, the overall market was trending up.
Tim Keating, CEO of the investment firm Keating Capital Inc., said IPOs screeched to a halt following Facebook Inc.’s bumpy debut in May. But he said 2012 has still been a very good year for IPOs so far. On Friday alone, Kayak Software Corp., a travel website, and Palo Alto Networks Inc., which makes security software, both went public and posted gains of more than 30 percent.
But Keating, whose firm invests in companies looking to go public, noted that both of those companies are focused on technology and have potential for growth.
