6 Major Tech IPOs and What $1,000 Can Turn Into
Few things haunt an investor more than a missed opportunity. A loss, of course, is worse (as Warren Buffett infamously put it: “Rule No. 1: never lose money; rule No. 2: don’t forget rule No. 1) and no growth is hardly something to write home about, but a missed opportunity is something that sticks around. Psychologically, it is difficult to get rid of — the behavioral economists probably have a lot to say about why — and market watchers tend to spend a fair share of time wondering about what could have been.
What could have been, for example, if you had invested $1,000 in Tesla Motors (NASDAQ:TSLA) in March or April of this year? At $40 a piece, that would be 25 shares, now worth about $3,718, even after a 15 percent post-earnings slide. (Your investment would be worth about $4,420 if you smelled the pre-spice mass and got out before the bubble burst, however modestly.)
One of the biggest could-be opportunities on the horizon is the Twitter (NYSE:TWTR) initial public offering. As it stands, speculation is that most retail investors will lose out on most of the initial hype-induced gains expected to be realized on the first day of trading, but with enormous growth potential behind it, Twitter still has tremendous allure. In the spirit of things, we’re going to indulge in some “what could have been” scenarios involving major technology and Internet stocks. Whether any given investment was a missed opportunity or a headache well avoided we’ll leave up to you.
1. Facebook (NASDAQ:FB)
Facebook launched its IPO in May of 2012 and quickly went down in history as a good example of what not to do when crossing the private-public barrier. Facebook’s IPO price was $38 per share, but technical glitches and the deflation of the hype bubble dropped the stock as low as $26 per share, a 31.5 percent loss, by June. After a brief resurgence where shares touched $33, they began to slide again, bottoming out around $17.70 in September 2012.
The story since then has been good. Even when the stock was trading 30+ percent below its IPO price, there were plenty of investors and analysts who thought the stock was a fine (although perhaps not amazing) long-term investment. Shares bumbled more or less aimlessly (sideways) until July of 2013, when incredibly strong second-quarter earnings removed the last of the roadblocks. Shares pretty much instantly shot back up to their IPO price and have since climbed further, touching a recent 52-week high of $54.83.
A calculation performed by Statista shows that if you had invested $1,000 in Facebook on May 18, 2012, your investment would be worth $1,269 as of November 4.
2. LinkedIn (NYSE:LNKD)
LinkedIn launched its IPO on May 19, 2011 at $45 per share. Like with Facebook, pretty much the first thing shares did once on the public market was lose value, and then enter a period of fairly volatile sideways trading. It wasn’t until 2012 that the stock really got legs, but by 2013 shares began to climb rapidly on the back of improved company performance and a higher general level of interest and trust in Internet stocks.
A calculation performed by Statista shows that if you had invested $1,000 in LinkedIn on May 19, 2011, your investment would be worth $4,972 as of November 4.
3. Google (NASDAQ:GOOG)
Google bulls have existed for as long as the brand has. The Internet services firm, founded in 1998 by Sergey Brin and Larry Page, hit public markets in 2004, and has pretty much made investors wealthier ever since. Shares debuted at $85 a pop, and as the world’s leading search engine and one of the largest advertising platforms on the planet, Google has experienced tremendous growth over the past few years.
Carlos Kirjner of Bernstein Research predicted in February that Google would hit $1,000 this year — which, at the time, would require 29 percent growth over a 52-week period, immediately following a 52-week period of 29 percent growth — but the company exceeded even that lofty expectation.
A calculation performed by Statista shows that if you invested $1,000 in Google in August of 2004, your investment would be worth $12,072 as of November 4.
4. Yahoo! (NASDAQ:YHOO)
Yahoo launched its IPO on April 12, 1996 at $13 a share. The offering raised $33.8 million at the time. The company participated in the madness that was the dot-com bubble, with shares hitting an all time high of $118.75. Shares collapsed as low as $8.11 in 2001 in the wake of the collapse of the bubble, but Yahoo emerged one of the few resilient tech companies. Shares have clawed their way back to a recent 52 week high of $35.06 under the leadership of CEO Marissa Mayer.
A calculation performed by Statista shows that if you invested $1,000 in Yahoo in April 1996, your investment would be worth $61,638 as of November 4.
5. EBay (NASDAQ:EBAY)
Ebay went public on September 21, 1998 at $18 per share (the stock has been split four times since then). Ebay had an incredibly successful IPO — shares climbed more than 163 percent on its first day of trading, and the stock rode the 2000 tech bubble to its peak. The IPO came during dry spell for IPOs, which could have played a factor in its success. A calculation performed by Statista shows that if you invested $1,000 in eBay at its IPO, your investment would be worth $68,638 as of November 4.
6. Amazon (NASDAQ:AMZN)
Amazon has gone from being the little engine that could to the powerhouse that nobody can stop. Amazon launched its IPO on May 15, 2007 (a popular month for tech IPOs) at $18 per share, and promptly soared 30 percent. Similar to other major tech companies, Amazon’s IPO price was raised several times right before its debut. Amazon’s IPO raised $54 million and gave the company a market value of $438. Amazon now trades at about $356 per share with a market cap of $163 billion.
A calculation performed by Statista shows that if you invested $1,000 in Amazon at its IPO, your investment would be worth $239,045 as of November 4.