Facebook, GM lead 2010 IPO candidates

NEW YORK (CNNMoney.com) -- The stars may very well align for the IPO market in 2010. Literally.

Following one of the worst years in recent memory, public offerings are expected to rebound nicely this year, with potentially much of the action centered around several high-profile companies.

Embattled automaker General Motors, for example, has hinted since last summer that it could once again become a publicly-traded company by year's end.

Private equity giants Kohlberg Kravis Roberts and Apollo Global Management, both of which missed entering the market at the peak of the buyout boom, have both mentioned as possible entries in 2010 recently.

And the IPO rumor mill has been working overtime since social networking giant Facebook introduced a dual-class stock structure in November, a move that often times has preceded a public offering. Google (GOOG, Fortune 500) did the same thing before it went public in 2004.

"I don't think it is a matter of if[Facebook] can or cannot, it is a matter if they want to," notes finance author Tom Taulli, who has written extensively about the IPO market.

If Facebook, GM and other brand-name firms decide to enter the public markets, that could help push the number of U.S. offerings far beyond 2009 levels. Last year, just 63 companies went public as investors avoided wading into the market chaos that defined the first half of last year.

Those that did brave the turmoil included a rather strange group of bedfellows --including a Chinese online gaming firm, a company developing lithium-ion batteries for cars and nearly two dozen companies that were backed by private equity firms.

This year though, experts are betting that the IPO market will largely be dominated once again by companies that have been bankrolled by venture capital investors. These companies are typically younger firms as opposed to the mature companies that private equity companies often buy.

During the final months of 2009, 16 venture-backed firms filed to go public, according to Renaissance Capital, a Greenwich, Conn.-based investment firm specializing in IPOs, including drugmaker Ironwood Pharmaceuticals and solar panel producer Solyndra.

With that in mind, Linda Killian, a portfolio manager of the IPO Plus Aftermarket Fund at Renaissance Capital, said that more growth companies are likely to be in this year's crop of IPOs.

And in the growth company category, there is no industry more buzzed about than social networking.

In addition to Facebook, social networking hotshots Twitter, LinkedIn and Zynga have all been rumored as possible IPO candidates.

Experts tend to agree that it is only a matter of time before many of these firms start considering acquisitions however. And with publicly traded stock, that would certainly give them the currency to do so.

John Fitzgibbon, founder and publisher at IPOScoop.com, said if one social networking company goes public and does well, then conditions would be ripe for the rest to follow.

"You need the trailblazer," he said. "If Facebook goes into the pipeline, you will probably see more of its competitors start there."

Still, even though financial markets have rebounded from last year's lows, some think the climate for offerings remains less than ideal. Investors are on edge about inflation and a possible economic double dip.

Partly for those reasons, experts said more IPOs could also come as a result of spin-offs from already public companies in the coming year. More businesses may want to take a hard look at their different units and sell off divisions that no longer fit strategically.

Time Warner (TWX, Fortune 500) reversed its ill-fated merger with AOL by spinning off the former dial-up giant in December. (Time Warner is the parent company of CNNMoney.com.) And in one of its last major moves before the end of 2009, Citigroup (C, Fortune 500) filed to take its life insurance unit Primerica public.