Many hotly anticipated IPOs went bust over the last 12 months
The market has performed extremely well this year, with the Nasdaq up more than 34 percent and the Dow rising 22 percent, both hitting record highs. With a market that hot, it’s not surprising that many companies that had put off their IPOs suddenly began to see a big opportunity to hit the ground running.
And, yet, it didn’t quite work out that way for new tech stocks. many of which under performed this year. Even as the established players like Facebook, Twitter, Microsoft and Amazon all saw their stocks rise over the last 12 months, new companies like Lyft, Uber, Slack and Pinterest all got hit hard, ending the year below where they started.
While that doesn’t mean those companies won’t bounce back, there does seem to be a shift happening in the way these companies are viewed, with investors having less patience with a companies that aren’t showing they can be profitable. A report from Bank of America Merrill Lynch in October found that the proportion of unprofitable companies going public has reached 70 percent, the highest level in 20 years.
“Recent IPO withdrawals could be a warning sign that investors are shifting focus to profitability amid macro concerns,” BAML strategists wrote in a note to their clients.
“The potential ripple effect could be significant — tech innovation has been one of the biggest deflationary factors and if companies start focusing more on profitability via pricing, we could start to see an upward pressure in inflation.”
Here’s how some of those new tech stocks that went public this year performed:
IPO date: October 25
Amount raised in IPO: $82 million
IPO price: $13
Opening price: $13.5, up 3.8 percent
Closing price: $15.94, up 18 percent
Market cap at IPO: $1.3 billion
Current price: $28.21, up 117 percent from IPO price
IPO date: April 18
Amount raised in IPO: $356.8 million
IPO price: $36
Opening price: $65, up 80.6 percent
Closing price: $62, down 4.6 percent
Market cap at IPO: $16 billion
Current price: $66.79, up 85.5 percent from IPO price
IPO date: June 12
Amount raised in IPO: $612 million
IPO price: $34
Opening price: $63.50, up 86 percent
Closing price: $58, down 8.7 percent
Market cap at IPO: $7 billion
Current price: $50.02, up 47 percent from IPO price
IPO date: July 25
Amount raised in IPO: $182 million
IPO price: $26
Opening price: $37.50, up 44.2 percent
Closing price: $39.17, up 4.5 percent
Market cap at IPO: $784 million
Current price: $34.50, up 32 percent from IPO price
IPO date: April 18
Amount raised in IPO: $1.43 billion
IPO price: $19
Opening price: $23.75, up 25 percent
Closing price: $24.40, up 2.7 percent
Market cap at IPO: $12.6 billion
Current price: $18.09, down 5.8 percent from IPO price
IPO date: June 28
Amount raised in IPO: $300 million
IPO price: $20
Opening price: $28, up 40 percent
Closing price: $28.9, up 3.2 percent
Market cap at IPO: $2.39 billion
Current price: $18.05, down 9.7 percent from IPO price
IPO date: July 25
Amount raised in IPO: $355 million
IPO price: $28
Opening price: $40.51, up 44.7 percent
Closing price: $38.10, down 6 percent
Market cap at IPO: $2.1 billion
Current price: $24.09, down 14 percent from IPO price
IPO date: June 20
Amount raised in IPO: None
IPO price: $26
Opening price: $38.50, up 48 percent
Closing price: $38.62, up 0.3 percent
Market cap at IPO: $19.5 billion
Current price: $22.21, down 14.6 percent from IPO price
IPO date: May 13
Amount raised in IPO: $8.1 billion
IPO price: $45
Opening price: $42, down 6.6 percent
Closing price: $41.57, down 7.6 percent
Market cap at IPO: $82 billion
Current price: $29.73, down 33.9 percent from IPO price
IPO date: March 29
Amount raised in IPO: $2.34 billion
IPO price: $72
Opening price: $87.24, up 21 percent
Closing price: $78.29, up 8.7 percent
Market cap at IPO: $24.3 billion
Current price: $43.58, down 39.5 percent from IPO price
(Image source: foolcdn.com)
