The decline in the value of biotechnology shares, and the impact that has had on New York investor David Blech's portfolio, is adding one more negative factor to the gloomy market for initial public offerings.

Blech's firm, D. Blech & Co., has been one of the last remaining outlets for companies wanting to go public. But last week's assault by investors on the companies in Blech's personal portfolio and on the companies he has underwritten, combined with generally falling share prices, will likely prompt increased caution on the part of D. Blech.

The firm and its associates are not commenting and choosing not to refute publicly the spate of rumors that surrounded D. Blech's activities last week. But according to knowledgeable sources, D. Blech will limit the size of its deals to $15 million in response to the market's condition. The firm "will test the waters on smaller and smaller deals until it gets it right - it's better than not trying," said one source.

Rumors about the level of the firm's capital resources and Blech's need for cash raged across Wall Street throughout the week. The talk ranged from the plausible to the wildly improbable - from the bank falling below its capital requirements, to all of its IPOs being pulled, to marshals shutting its doors.

Bear raid

Some, such as the fact that the bank's doors remained open, that its IPOs hadn't been pulled and that it hadn't fallen below its capital requirements, were easily verifiable. But that didn't stop the rumors.