Editor’s note: This article was first published in March 2013. All its figures are as of then, including Inditex above 105 euros per share against a 14.70 euro IPO price, Grifols up 545% and LinkedIn up 321%. Inditex has since split its shares, and Facebook later rose well above its IPO price.
IPOs (initial public offerings) can be a great investment opportunity, though not without risk. Sometimes it pays to be first, but here being first may not be such a good idea: after a company goes public, it’s the market that eventually puts it in its place. Here are the most profitable IPOs to date, and the least profitable.
Unsurprisingly, the big winner is Inditex: it went public at 14.70 euros a share and has now passed 105 euros, a capital gain of 633%. It is followed by Grifols, up 545%.
On the losing side, leaving aside Bankia, we have two of the big names in the press, Grupo Vocento and Grupo Prisa. Anyone who bought into these media groups’ IPOs and held on has lost practically all their money (92–98%), as has anyone who invested in Solaria, Corporación Dermoestética and GAM.
Across the Atlantic we find the big tech stocks, whose stock market debuts we saw recently. (Data: Estrategias de Inversión.)
The big winner, by a huge margin, is the professional network LinkedIn, up 321%. The big loser is Groupon, which has shed more than 70% and still raises plenty of doubts about the discount-coupon business, due to what may be poor management of the company.
Zynga raises even more doubts, while Facebook is the market’s big unknown, although we expect it to beat its IPO price in time.
As we can see, an IPO can be a great investment opportunity, but it can also be a complete fiasco.
Further reading
Featured image: LPS.1, CC0 1.0, via Wikimedia Commons.
