It’s been a long, strange trip for Orange County’s public companies.
The Grateful Dead they’re not, but the county’s biggest publicly traded businesses have seen plenty of upheaval in the past five years,a period marked by a technology high followed by a damaging economic low. Today, the stock markets are somewhere in between.
Each week, the Business Journal in association with Newport Beach-based Roth Capital Partners LLC produces stock charts that track OC’s public companies. The biggest of them make Roth’s Billion-Dollar Club, which includes local companies with market values of $1 billion or more.
The makeup of the Billion-Dollar Club has been anything but static in the past five years.
Some companies that once had market values of more than $1 billion withered by 2002 and now are shadows of their former selves,think Newport Beach-based chipmaker Conexant Systems Inc. after numerous spinoffs.
And companies that were mere saplings during the boom of the late 1990s now are OC’s corporate leaders,think Irvine-based Commercial Capital Bancorp and Huntington Beach-based Quiksilver Inc.
The national stock indexes peaked in August 2000. The Nasdaq index was worth about 5,000, the S & P; 500 Index registered more than 1,500 and the Dow Jones Industrial Average was tracking toward 13,000. Two years later, the stock markets had been devastated with trillions of dollars of investor wealth gone.
In the 1990s, new communication technologies spurred venture capital investment that led to a tech boom and hyper-inflated market values.
When the bubble burst, investors stopped pumping money into technology companies, causing billions in market value to disappear.
Consumer spending weakened and the Federal Reserve Bank trimmed interest rates. That move caused a new boom,this one in real estate.
High property values buoyed spending as consumers used newfound home equity to make purchases.
In the meantime, companies worked through excess inventory and venture investors began to take another look at new investments,this time at medical device makers and biotech companies.
The result? Dramatic changes to the Billion-Dollar Club.
At the peak in 2000, there were 21 companies that had market values of more than $1 billion. That group fell to 16 during the downturn but has rebounded dramatically to 29 today.
The makeup of the Billion-Dollar Club has changed along with its size.
Take technology. In 2000, 10 OC technology companies had market values of more than $1 billion. Today, there are seven. Who fell off?
Remember Anaheim-based DDi Corp., the contract electronics manufacturer? It declared bankruptcy in 2003. Perhaps you recall Intersil Holding Corp., the chipmaker formerly based in Irvine? The company moved its headquarters to Milpitas after being in Irvine for three years.
Broadcom: Once Worth $60B
Perhaps the company that has seen the most dramatic ups and downs is Irvine-based chipmaker Broadcom Corp.
Broadcom, which went public in 1998, has seen its market value soar as high as $60 billion. Its shares peaked along with other tech companies in 2000, but by 2002 its value had fallen by 95%.
The chipmaker since has embarked on a growth strategy that included numerous acquisitions. Under the stewardship of former interim chief executive Alan E. “Lanny” Ross, Broadcom’s shares rebounded some and its market value now checks in at $9.9 billion,still OC’s biggest.
But the market forces that drove the decline of tech companies on the Billion-Dollar Club also have provided opportunity for others.
Look at real estate. Thanks to low interest rates that have helped spur a housing boom in OC and the U.S., real estate-related companies have grown at dizzying rates.
Back in 2000, only two companies that made money from real estate,First American Corp. and Fidelity National Financial Inc.,were on the Billion-Dollar list.
Fidelity has moved to Jacksonville, Fla., but the list still counts five pure real estate companies: Impac Mortgage Holdings Inc., Nationwide Health Properties Inc., New Century Financial Corp., Standard Pacific Corp. and First American. Two others,Downey Financial Corp. and Commercial Capital,derive a big share of income from real estate lending.
OC’s sizeable healthcare industry also has given the list more heft. Ten companies in the Billion-Dollar Club are medical device makers, drug makers, health plan providers and other healthcare companies. In 2000, there were seven.
