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This week's technology IPOs could be diamonds in the rough

August 8, 2011

The US IPO calendar swells to eleven IPOs this week, but no one expects this week's offerings to soar. The IPO market did not emerge unscathed from the bloodbath of last week: employee-benefit software provider WageWorks (WAGE) slashed its price range by 35% and pushed back its offering, while healthcare company WhiteGlove (WGH) and Chinese biofuel producer Cathay Industrial Biotech (CBIO) also delayed their IPOs due to weak market conditions.

With investors reeling and the markets awash in red, the IPOs with the best chance of pulling through will be those with strong business models and compelling secular growth. Likely to escape the carnage this week are three tech offerings with solid stories: online backup solutions provider Carbonite (CARB), motion sensor manufacturer InvenSense (INVN), and on-demand security software provider Trustwave Holdings (TWAV).

Read more about Carbonite, InvenSense and Trustwave's business, risks and outlook.

Technology has been the most popular sector for the US IPO market, representing 30% of deals priced over the last 12 months, and has also accounted for some of the most successful deals (e.g. LinkedIn (LNKD, +79% from IPO), ServiceSource (SREV, +64%), Zillow (Z, +31%) and Fusion-io (FIO, +31%)). Carbonite, InvenSense and Trustwave look to extend this trend of success, holding solid track records and positioned in growing markets. With the financial crisis dampening broader investor interest in IPOs, these tech deals could potentially be diamonds in the rough.