This is what happened to the missing AppNexus IPO - it's partly Snapchat's fault

• People keep talking about an IPO for AppNexus, the New York ad tech company valued at $2 billion. But it keeps not happening.
• An insider tells us that lousy IPOs - such as Snapchat - poisoned the market, so AppNexus is biding its time.
• "The only companies going out were the ones needing the cash," our source tell us, and AppNexus doesn't need the cash.
• "We'd like to go out," our source says. But "it's an unforgiving environment."

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Since at least 2013, folks in the ad tech business have been expecting the AppNexus IPO.

The online ad company filed confidentially to begin the IPO process in 2016, but two calendar years later there is still no sign of a public stock listing for New York's biggest "unicorn," last valued at about $2 billion.

The IPO was first expected in spring 2017. Then the expected date got pushed back to the second half of 2017. Now it's 2018 and, a source tells us, don't hold your breath.

A mixture of negative variables, many beyond the company's control, have conspired to keep AppNexus off the market, a source close to management told us. A company spokesperson declined to comment when reached by Business Insider.

Partly, it's Snapchat's fault.

The SNAP IPO performed "abysmally" upon its launch, our source notes, with its stock falling below the opening offer price of $17 per share and staying there for another 6 months before finally rising above the IPO price in the last few days. "It broke the issue price," our source says. "It was bad."

SNAP poisoned the market for tech IPOs generally. Banks advising AppNexus said, "Don't be the second one" out of the gate after SNAP. "Everybody was reticent."

That led to a situation that compounded AppNexus's problem: Healthy companies - like AppNexus - didn't want to go public into a stock market that hated tech IPOs. But more desperate tech companies simply needed the money, and were forced to launch anyway. Thus, "the only companies going out were the ones needing the cash."

Their stocks got hammered, making tech IPOs look even worse. For instance, Blue Apron's IPO offer price was $10; it was last seen at $3.26, a nearly 70% loss.

Established ad tech players like Rubicon and Criteo also fared poorly in the last couple of years. Criteo has lost a third of its value, Rubicon has lost 90% and is close to becoming a penny stock.

"We had the better house in a bad neighborhood," our source says.

There has been one bright spot in ad tech IPO land: The Trade Desk, whose stock has held up as its revenues have grown larger. But the rate of its growth is slowing.

"That's the best story - and it's not the 'best' story," the source says.

AppNexus has similar high-class problems: Business Insider estimates its revenues might currently be around $350 million per year, but with those big numbers come the problem of declining growth percentages. The "big numbers problem" is common to a lot of companies that mature into large, solid businesses - it gets harder to move the revenue needle over time because you need new businesses that pay in the millions or more to get there.

AppNexus has also done a substantial amount of rebuilding among its clients. Its "IQ" program weeded out invalid traffic or abusive clicks, reducing the available impressions it was selling by 35%. That reduced total spend on the platform by about 3% that year (because most spending occurs on household name websites that don't practice click fraud). Nonetheless, the optics weren't helpful.

Now the company has more direct relationships with publishers, agencies, and brands, and isn't so reliant on networks. Apple's addition of an ad-blocker to its Safari mobile web browser didn't help the scene either. Retargeting - those shopping ads that seem to follow you around the web - isn't a big part of AppNexus's business but the removal of tracking cookies from the iPhone added to the negative chatter about ad tech in general. "Apple has made it pretty much impossible to drop a cookie that tracks you," the source said.

That's the inside story, but the company's management is aware that promising an IPO and then failing to deliver looks weird from the outside.

AppNexus has taken about $281 million in funding. Its backers include WPP, Yahoo Japan, and News Corp. Those investors and board members aren't like Silicon Valley VCs, who need a scheduled "liquidity event" to justify their investment. "We don't need the capital." AppNexus is "not getting the pressure from VCs … just to have liquidity," our source says.

In the meantime, AppNexus is looking at small to medium-sized acquisitions, particularly in the video space, where it could use all the engineers it can get. The company serves about 57 billion ad requests per month through its video supply-side platform (on which publishers can offer ad space in online videos).

There is even talk of developing some kind of programmatic buying capability for local spot TV commercials - an area ripe for digital disruption that has seen repeated failures in the past (Walmart and WPP have both backed companies that failed). Our source said the company was aware that digitizing analog spot TV was something of a Bermuda Triangle for ad tech companies.

But back to the IPO. The company continues to file quarterly statements with the SEC, confidentially. It's ready to IPO. It just doesn't want to.

"We'd like to go out," our source says. But "it's an unforgiving environment."

Perhaps, later this year?