San Francisco’s tech industry has softened the blow of the national recession on the local economy and is viewed by some as a cornerstone of The City’s future economic growth.
The success of a tech company is often gauged by its ability to go public and shake up the market with a stock value exceeding its initial offering price.
Mayor Ed Lee has created incentives to encourage startup tech firms in San Francisco and keep successful ones from leaving town by offering a tax break on stock options when a tech company does goes public. And he offered Twitter a tax break on new hires in the mid-Market area.
However, tech companies do not always live up to the hype. San Francisco-based Zynga, maker of popular Facebook games such as “FarmVille” and “CityVille,” had hopes of becoming the next big stock market tech success, but its performance has been dismal. The stock has remained below the initial $10 stock offering.
Salesforce.com, a cloud computing company, is a tech success story for San Francisco. The company, which went public in 2004, has continued to grow.
The City is hoping to reap the benefits of similar success stories. The microblogging service Twitter is expected to go public in the coming years and Yelp, a business review site, is reportedly going public as soon as early 2012.
Tough industry Tech companies have had varied levels of success going public.
Went public: December 2011
IPO starting price: $10/share
Price as of market closure Friday: $9.41 / share
Went public: June 2004
IPO starting price: $11/share
Price as of market closure Friday: $101.46/share
Went public: June 2011
IPO starting price: $16/share
Price as of market closure Friday: $10.01 / share
Went public: April 2004
IPO starting price: $85/share
Price as of market closure Friday: $645.90/share
Went public: May 2011
IPO starting price: $45/share
Price as of market closure Friday: $63.01/share
Went public: July 2011
IPO starting price: $20/share
Price as of market closure Friday: $22.48/share
Twitter – San Francisco
- The microblogging company has no immediate plans to go public in 2012, but 2013 could be a different story.
Yelp – San Francisco
- The entertainment search site could go public as soon as early 2012.
Facebook – Palo Alto
- The social networking giant expects to sell stock in 2012.