Twenty IPOs That Wowed Investors
Some stocks make such impressive debuts that investors can't help but pay heed. In the last five years there were 50 U.S. initial public offerings, or IPOs, that jumped more than 35 percent on their first day of trading. History shows that such one-day pops say little about longer-term returns to shareholders, underscoring the danger confronting retail investors in the high-risk IPO market.
What follows are the 20 biggest IPOs of the last five years, as measured by their first-day stock market pop. Businessweek.com, using Bloomberg Rankings data, has assumed that individual investors would get their hands on shares only a week later. That's because few retail investors can secure them before they go on sale and since initial trading is frequently volatile, prudent investors often wait a bit for swings to settle before buying in.
Of the 20 examples, only eight stocks were trading higher a year later.
(All companies included were based in and traded in the U.S., with at least $100 million in market capitalization after one year of trading. Their IPOs were held between July 1, 2005, and June 30, 2010. Real estate investment trusts, or REITs, and special purpose acquisition companies, or SPACs, were excluded from the ranking. Share prices are adjusted for any stock splits. When a stock's all-time-high price occurred during the first week of trading--and thus before our hypothetical investment--that category is labeled "not applicable.")