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This article was published 20/7/2012 (2777 days ago), so information in it may no longer be current.
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 set on fire by Jimi Hendrix, said late Thursday 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 slower growth prospects than the tech companies that recently went public may have factored in Fender's decision not to move forward.
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 US$13 to $15 per share last week. At the time of its original filing, the overall market was trending up.
Tim Keating, CEO of investment firm Keating Capital, said IPOs screeched to a halt after Facebook's bumpy debut in May. But he said 2012 has been a good year for IPOs, with a handful of companies launching successful offerings in the past few weeks.
Kayak Software Corp., a travel website, and Palo Alto Networks Inc., which makes security software, went public Friday and posted gains of more than 30 per cent.
But Keating, whose firm invests in companies looking to go public, noted both companies are focused on technology and have potential for significant growth.
"When you look at the growth prospects, what excites IPO investors is the prospect of growing at least 20 to 25 per cent over the next few years, and Fender doesn't have those prospects as a more mature company," he said.
— The Associated Press