IPO Successes & Failures: Rocket Launches & Flameouts

by Archynetys Economy Desk

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primarykeywords: IPO,FinTech,investment,stock market,business failures,business success
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NEW YORK – As summer approaches,the financial world anticipates potential IPOs from FinTech companies like Chime and Klarna,testing the strength of the market for new offerings. In light of these upcoming events,it’s a good time to examine some of the most notable IPO successes and failures of the past 25 years.

IPO Hall of Fame

(Listed chronologically)

  • Alphabet (née Google), 2004: Initially priced at $85, a single dollar invested in its IPO would be worth approximately $55 today, a 5,400% increase.
  • visa, 2008: The payments network’s IPO raised a record $17.9 billion. A $10,000 investment at the IPO would be nearly $200,000 today, not including dividends.
  • Tesla, 2010: Debuting at $17 per share, the stock has risen over 3,000%, even after recent market fluctuations.
  • Salesforce,2004: The saas company’s IPO price was $11.Today, that investment would be worth around $272, meaning a $1,000 investment would be worth over $60,000.
  • shopify, 2015: The eCommerce platform has seen a 3,600% total return in a decade.

(Honorable mention: Snowflake‘s 2020 IPO doubled on its first day and currently trades ~75% above its $120 initial price.)

IPO House of Shame

(Examples of IPOs that did not live up to expectations)

  • Pets.com, 2000: After raising $82.5 million and investing in a Super Bowl ad, the company filed for Chapter 11 nine months later.
  • Groupon, 2011: After opening at $28, the stock fell below its $20 IPO price within three weeks.
  • Blue Apron,2017: The company’s market cap decreased by 99% before it was sold for $103 million in 2023.
  • Smiledirectclub, 2019: After debuting at $23, the company was delisted four years later after falling to eight cents and filing for chapter 11.
  • WeWork, 2021 (SPAC edition): After going public at a $9 billion valuation, the company’s value dropped by over 99%, leading to bankruptcy.

Lessons from IPOs

  1. Size ≠ Success: Large offerings do not guarantee positive performance.
  2. Business Model Beats Buzz: A solid business model is more crucial than marketing hype.
  3. Time in Market Trumps Timing the Market: strong fundamentals can overcome market cycles.

As Chime and Klarna prepare for potential IPOs, it’s important to remember that the IPO is only the beginning. The long-term success of a company depends on its ability to execute its business plan and adapt to changing market conditions.

Have a good week,and here’s hoping your investments perform well.

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