How Much You Would Have Made If You Bought These IPOs
2019 is becoming a big year for IPOs, but just how rich would you be if you bought in when these big companies went public.
Facebook / IPO Price: $38 / Current Price: $178
One of the most well known IPOs this century, Facebook captured attention globally and raised $16 billion. This was the third largest IPO of its time after Visa Inc. and AT&T Wireless.
An IPO wrought with controversy and declining share prices at first, this can go to show just how volatile share prices can be when a company first makes its public offering. A company now synonymous with the technology and social media industry, as well as the internet on the whole, had a tumultuous few years. With SEC and FINRA investigations plaguing sentiments for a while, if you bought in at the IPO you’d be holding a 368% return on investment. Certainly nothing to balk at.
Google / IPO Price: $85 / Current Price: $1,241
In a considerably less dramatic and difficult IPO, Google raised $1.67 billion very early in its commercial lifetime. Who would have known in 2004 that Google Search would expand to dominate the market, while the company developed new products that we still take for granted
With the acquisition of YouTube as well as popularisation of Google Mail, it’s hard to imagine the internet without Google. If somehow you had foreseen such explosive growth within the company and bought in at IPO, you’d be holding a 1,360% return on investment, significantly more explosive growth than that of Facebook.
Twitter / IPO Price: $26 / Current Price: $34.40
As popular as Twitter is, it’s had a difficult time when it comes to the world of finance. With years of slow growth and aversion from monetising the platform early, investors were putting a lot of faith in the company to generate a revenue stream in the future.
Only recently returning positive annual earnings in 2018, holding onto an investment in Twitter would have been a wild ride full of temptation to sell as it became harder and harder to trust the company to draw in cash. If however, you had stood the test of time in your investment, you’d be holding a 32.3% return on investment. Certainly nothing particularly special, there’s a good chance that Twitter has a lot of room to grow in the future, and we may still be seeing the company in a relatively early stage of its life.
While these companies are seen as titans in the industry now, the difference in investment returns just goes to show how tough it can be to determine whether or not an IPO is going to deliver the returns you’re hoping for. The trouble is, for every one of these explosive growths there will be times of negative sentiment in the market, making it very difficult to tell if you’re just weathering the storm, or if you’re hanging onto a losing stock for far too long.
Keep this in mind as we navigate the twists and turns of 2019’s public offerings. We’ve seen Pinterest and Lyft already, but there’s plenty more to go, especially with Uber taking the limelight on Wall Street.
