The number of initial public offerings – private companies that offer shares of stock to the public by listing their shares on stock exchanges – rose in U.S. stock markets to a record of 1,058 IPOs in 2021. This was well over double the number of IPOs in 2020, the previous record.
Over the past decade, a majority of IPOs ended the day higher than on debut – nearly 70% from 2008 to 2020. How much higher, of course, differed from stock to stock and by year. In 2020, the average return at the end of the first day, also referred to as “IPO pop” was 38%, but it was a much lower 8% in 2010, according to Nasdaq data. (Is IPO investing among the things to do if you want to retire early?)
On rare occasions, the value of the stock at the end of its first trading day can be multiples higher than the price at the start of the day. This is known as a runup.
To determine the biggest IPO runups of the last 50 years, 24/7 Wall St. reviewed the report “Big IPO Runups of 1975-2022, as of January 18, 2022,” prepared by Professor Jay R. Ritter of the University of Florida’s Warrington College of Business. The report lists the over 300 IPOs – common stock offerings, unit offerings, and those with an offer price of less than $5.00 and proceeds of less than $5 million of non-ADR operating companies – that more than doubled on their first day of trading from 1975 through Nov. 24 2021.
One of the more telling details about this list of companies that have had the biggest IPO runups on record is that many of these IPOs took place during the dot-com bubble that burst after March 2000. At the time, the internet was new and investors were jumping on anything that sounded like the Next Big Thing. Nineteen of the 25 companies on this list had their huge runups in 1999 or 2000. (These are the 20 best performing hedge funds of all time.)
Some of the companies on this list have since been acquired, such as MarketWatch.com. The financial news site was purchased by Dow Jones & Co. in 2007 for $528 million, or $18 per share – just $1 more than its 1999 IPO offer price and well below the closing price that day of $232.
This list of IPO runup leaders also includes Priceline.com, which still exists today as largely the same company it was when it went public in 1999, albeit its stock is sold under its parent company Booking Holdings. There’s also a noticeable bust in social networking site theGlobe.com, which went belly up in 2008, a decade after its IPO — theGlobe.com’s shares closed their first day seven times higher than the stock’s initial offer price.
The more recent IPO runup leaders include Esports Technologies, which develops platforms for competitive video gaming, and Chinese financial services provider Sentage Holdings.
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