Creditcards.com announced today that they are going to delay their IPO, which was scheduled to price this week. Citing the famous "market conditions" line, no other information was made available.

This is really bad news in many respects.

What could have happened? We have no insider knowledge on this deal, but we can speculate.

The roadshow is where you shop your offering to all the major securities dealers to get them to sign up for a block of shares to distribute to their brokers. At some point the dealers have to request a certain number of shares, and the price they’re willing to pay for those shares. If you have a hot offering, you’ve got more requests than shares to distribute, and you can either pick and choose who gets what, or you can dive into the over-allotment and sell more than you planned. Those are the good problems to have.

Typically the underwriter (Credit Suisse and Citi) guarantees price support after the IPO as part of the deal. If it comes out at $12 and in the 90 days following the prices goes down to $9, they will have to start buying in the open market to bring the price back up to the offering price. That can be very expensive. If demand isn’t strong, CS and Citi just plain aren’t going to take this thing out.

With the dollar hurting, gold soaring, oil soaring, and our government spending money like drunken sailors there isn’t a better IPO window for this deal anytime soon. Look for a private sale in the future.

What does this mean for Convio?

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