Initial public offering (IPO'er) er den proces, virksomheder bruger til at udnytte de offentlige aktiemarkeder for kapital. De involverer normalt virksomheder i en tidlig fase, der leder efter frisk brændstof til vækst; mange er små muligheder, men nogle få har et enormt potentiale.
IPO'er er ikke garanterede billetter til rigdomme, som implosioner såsom Pets.com og Webvan beviste. Men de kan producere eksplosive afkast, og det i en fart. I slutningen af september havde 38 tilbud givet afkast på 50 % eller mere. En ting, 2018 dog har manglet, er megaaftalen – et tilbud som Facebook (FB) eller Alibaba (BABA), der sætter verden i brand. Det skulle ændre sig i 2019.
Dara Khosrowshahi, CEO for ride-hailing service Uber, siger, at virksomheden forventer at gennemføre en børsnotering næste år. "Uber er et meget kendt mærke, der forbinder med millioner af forbrugere, og de har også modtaget store mængder kapital fra investorer gennem årene," siger Scott Coyle, CEO for ClickIPO, en online platform, der giver detailinvestorer mulighed for at købe børsintroduktioner. Ikke så mærkeligt, at The Wall Street Journal rapporterede, at forslag fra Goldman Sachs og Morgan Stanley vurderede virksomheden til mere end 120 milliarder dollars. I betragtning af at børsnoteringer ofte hæver omkring 10 % til 15 % af deres forventede værdi, kan det være en stigning på 12-18 milliarder dollars.
Hvor ville det være blandt USAs største børsnoteringer? I dag vil vi se tilbage på de 25 største handler i amerikansk historie, målt på indsamlede penge.
Royal Bank of Scotland (RBS) betalte 440 millioner dollars for Citizens Financial Group (CFG, $34,92) i 1998 i et forsøg på at ekspandere til det amerikanske marked. Men den globale finanskrise i 2007-08 forstyrrede virksomhedens ambitioner. Den britiske regering, som ejede omkring 80 % af RBS som et resultat af en redningspakke på 42 milliarder dollars, pressede på for en Citizens-spinoff.
På det tidspunkt var banken den 13. største i USA med 130 milliarder dollars i aktiver og beskæftigede mere end 18.000 medarbejdere fordelt på omkring 1.230 filialer i 11 stater, primært i New England, Midt-Atlanterhavet og Midtvesten.
Børsnoteringen var et vanskeligt salg. Renterne var på historisk lave niveauer, hvilket gjorde det vanskeligt for banker at generere robuste overskud, og den amerikanske økonomis opsving blev stadig betragtet som træg. Det oprindelige prisinterval for udbuddet var $23 til $25 per aktie, og Citizens fik kun $21,50. Aktierne steg en smule på den første handelsdag, men kun med omkring 7 %.
Den amerikanske økonomi (og renterne) kom til sidst i vejret, men styrkede bankaktierne. Borgernes aktie er vokset med 62 % i forhold til dens børsnoteringskurs, sammenlignet med en stigning på omkring 43 % for Standard &Poor's 500-aktieindekset.
Mao Zedongs regering oprettede People's Insurance Company of China (PICC) inden for et par uger efter at have overtaget kontrollen over Kina i 1949. Men da landet bevægede sig yderligere mod kapitalisme i 1990'erne, blev PICC omstruktureret, opløst og derefter erstattet af fire andre stater -ejede virksomheder, herunder China Life Insurance (LFC, $10,75).
China Life var den største livsforsikring i landet, da den blev offentliggjort i slutningen af 2003. Den havde et massivt distributionsnetværk af eksklusive agenter og kunne prale af 44 millioner policer, hvilket er godt for omkring 45 % markedsandel. Dens indtjening i 2003 nåede op på omkring $547 millioner.
Investorer var ivrige efter at få en del af børsnoteringen, fordi de så det som en måde at deltage i den stærke vækst i den kinesiske økonomi, hvis BNP voksede med 8 % til 9 % årligt på det tidspunkt.
LFC's aktier sprang med 29 % på deres første handelsdag, og bullishness ville fortsætte, med aktien, der hoppede fra udbudskursen på $18,68 til et maksimum på $35,58 i 2007. Men finanskrisen påvirkede aktierne hårdt, som faldt til så lavt. som $11,15 allerede næste år. Siden da har China Life haft svært ved at få trækkraft takket være konkurrence og lave renter. Faktisk sidder alle, der har købt til tilbudsprisen, på et betydeligt tab lige nu.
Microsoft (MSFT) medstifter Paul Allen, som for nylig døde, brugte 2,5 milliarder dollars i kontanter i juli 1998 på at erhverve Charter Communications (CHTR, $318,10). Han fusionerede derefter virksomheden med en anden af sine kabelbeholdninger, Marcus Cable, som han købte for 2,8 milliarder dollar tidligere på året. Hans vision var, at kabelselskaber ville blive centrum for internetrevolutionen på grund af fiber med høj båndbredde, og kalde det den "kablede verden."
Allen udnyttede også det blomstrende børsnoteringsmarked ved at offentliggøre Charter Communications i slutningen af 1999. På det tidspunkt var Charter den nr. 4 kabeloperatør i USA med 6,2 millioner abonnenter, og dets tilbud var den største handel i kabelhistorien . Aktierne steg med 31 % på deres første handelsdag.
Charter stod over for et massivt problem:en eskalerende gældsbelastning, der nåede uholdbare niveauer i 2009, hvilket tvang virksomheden til at omstrukturere under kapitel 11-konkurs. Det gjorde det dog muligt for Charter at udslette en del af gælden, og virksomheden begyndte at køre og handle i de kommende år, herunder at købe Time Warner Cable og Bright House Networks.
I dag er Charter en virksomhed på næsten 84 milliarder dollars, der kan prale af mere end 26 millioner kunder i 41 stater.
Den finske regering oprettede det finske telegrafbureau – landets teleoperatør – i 1917. Men i 1990'erne indså regeringen, at ændringer var nødvendige, herunder privatisering af telekommunikation, som ændrede navn til Sonera .
Børsnoteringen i 1999 – som stadig efterlod den finske regering med omkring 58 % kontrol – var dog undervældende. Aktier genererede blot 3,5 % gevinst på deres åbningsdag.
Den vigtigste drivkraft bag enhver vækst i Sonera var mobilmarkedet. Finland, som en påmindelse, var hjemsted for en af verdens største håndsætproducenter på det tidspunkt, Nokia (NOK), og omkring 65 % af Soneras omsætning kom fra mobil.
Men i de par år, der fulgte Soneras tilbud, viste vækst sig vanskelig, virksomheden stod over for voksende omkostninger til at bygge et næste generations netværk, og dot-com-busten havde en negativ indvirkning på tværs af teknologiområdet. Alle disse faktorer fik Sonera til at fusionere med den svenske teleoperatør Telia (TLSNY) i 2002.
Flytningen tilføjede skala, og over tid var den fusionerede enhed i stand til at vokse endnu mere via opkøb. Nu er Telia det førende mobil-, fastnet- og bredbåndsselskab i Norden og Baltikum med en samlet abonnentbase på 23,1 mio.
Stanford-studerende Evan Spiegel og Bobby Murphy grundlagde Snap (SNAP, $6,81) i september 2011. Virksomheden var baseret på Snapchat-appen til sociale medier, som skilte sig ud på grund af dens funktion, der fik billeder og beskeder til at forsvinde efter meget kort tid.
Appen brød hurtigt i brand og tiltrak millioner af (for det meste yngre) brugere. Facebooks Mark Zuckeberg tænkte endda så meget på muligheden, at han tilbød 3 milliarder dollars for at købe virksomheden i 2013. Spiegel og Murphy ønskede dog at kontrollere deres egne skæbner og offentliggjorde til sidst Snap i april 2017.
SNAP-aktien steg med 44 % på dens første handelsdag, hvilket gjorde medstifterne til milliardærer fra den ene dag til den anden. Interessen var høj:Virksomheden rapporterede trods alt en stor stigning i indtægterne, da den blev børsnoteret – inklusive vækst fra 58,7 millioner dollars i 2015 til 404,5 millioner dollars i 2016. Disse massive 2016-indtægter resulterede dog stadig i et nettotab på 514,6 millioner dollars.
Snaps liv som offentlig virksomhed har for det meste været en skuffelse. Virksomheden lider fortsat nicifrede kvartalsvise nettotab, og Instagram – som Facebook købte i 2012 – har trangt Snaps brugerbase, som faktisk faldt i andet kvartal af 2018. SNAP-aktier er i mellemtiden lavere end 60 % fra deres udbudskurs. af $17.
Året, hvor statsejede China Petroleum &Chemical (SNP, $81,31) - almindeligvis kendt som Sinopec - blev børsnoteret, det var Kinas næststørste olieselskab, bag PetroChina (PTR). Men regeringen ønskede at modernisere driften og rejse kapital til vækst, så det tog virksomheden offentligt.
Børsnoteringen tiltrak stor interesse fra Big Oil, hvor Exxon Mobil (XOM), BP Amoco - nu kun BP plc (BP) - og Royal Dutch Shell (RDS.B) tilsammen erhvervede 47,5% af udbuddet. Og aktier blev noteret i USA, London og Hong Kong. Men på trods af den institutionelle spænding var førstedagspræstationen en dæmpet gevinst på kun 0,48 %.
En billig værdiansættelse trak dog tilbudsjægere ind i bestanden, som ville fordobles på få år. Og faktisk er aktierne siden børsnoteringen mere end femdoblet, inklusive en aktiesplit på 13 for 10 i 2015. Selskabet fortsætter med at klare sig godt i dag; det producerede 6,2 milliarder dollars i nettoindtægt for første halvår af 2018 – et rekordstort halvårsoverskud for virksomheden.
Wall Street virkede oprindeligt interesseret, da Lucent ansøgte om et første offentligt udbud af sine Agere Systems unit, en optoelektronisk komponentvirksomhed. Imidlertid faldt det oprindelige prisinterval på $12 til $14 per aktie til sidst til en udbudspris på kun $6. Selv dengang var efterspørgslen svag, og aktierne steg kun 2 cents pr. aktie på deres første handelsdag.
Til kontekst:Dot-com-manien var for nylig afsluttet, hvilket førte til alvorlige nedskæringer i IT-udgifter. Lucent flyttede også mere end 2,5 milliarder USD af sin gæld til Agere, og virksomheden udstedte endda en indtjeningsadvarsel forud for børsnoteringen.
Når vi ser tilbage, er det utroligt, at handlen overhovedet blev gennemført.
Men modige investorer, der købte aktierne tidligt og holdt fast, blev rigeligt belønnet. Fem år senere solgte Agere sig selv til rivaliserende LSI Logic for 22,81 USD pr. aktie i LSI-aktien – et afkast på omkring 280 % for dets troende.
Investeringsbank Goldman Sachs (GS, $224,95) var en af de største fordele af det brølende tyremarked fra 1990'erne. Virksomheden tegnede sig for mange af æraens højprofilerede tilbud, plus det havde lukrative forretninger inden for formueforvaltning, M&A-rådgivning og handel.
Selskabets eget indledende forsøg på en børsnotering i 1998 måtte dog trækkes tilbage på grund af usikkerhed som følge af den asiatiske finanskrise. Men et år senere, da markederne kom i gear igen, gennemførte Goldman en handel med succes og så selskabets aktier hoppe 33 % på deres første handelsdag.
Børsnoteringen prægede en del formuer; Goldman Sachs' 221 partnere havde et gennemsnit på mere end $63 millioner i aktiebeholdning.
Goldman følte (som mange andre virksomheder) en vis smerte, efter at dot-com-boblen brast, men firmaet fandt hurtigt sit fodfæste, med aktier, der næsten firedobledes fra de lave $60s til de lave $240s … før finanskrisen og bjørnemarkedet slettede alt. disse gevinster, styrtede aktier tilbage i $60'erne.
Men Warren Buffetts Berkshire Hathaway (BRK.B) lavede et væddemål på 5 milliarder dollars på virksomheden i 2008, der fungerede som et tiltrængt godkendelsesstempel. GS nåede alle tiders højder tidligere i 2018, og Buffett tilføjede endda sin indsats i år.
Det hollandske ingeniørfirma GEC-Alsthom NV foretog nogle ændringer i sine meddelelser, før de blev offentliggjort i 1998, herunder et nyt logo og et nyt, enklere navn – Alstom (ALSMY, $4,31).
Virksomheden var co-ejet af General Electric Company (i U.K.) og den store teleudstyrsproducent Alcatel. Alstoms forretningssegmenter omfattede telekommunikation, elproduktion og strømtransmissionsudstyr. Men måske den mest bemærkelsesværdige del af virksomheden var dets højhastighedstogsystemer, som inkluderer Eurostar – den service, der forbinder London med flere kontinentaleuropæiske lande via Kanaltunnelen.
IPO-markedet var rødglødende i slutningen af 1990'erne, men Alstoms aftale fik et lunkent svar, og aktierne faldt hurtigt under deres udbudskurs. Det var noget af et varsel:I 2003 måtte virksomheden nærmest indgive en konkursbegæring. Alstom rapporterede et tab på 149,5 milliarder dollars for hele året, der skyldtes en gasturbine-designfejl, og det blev knust af et bjerg af gæld. For at støtte operationerne stillede regeringen en redningsplan på 3 milliarder dollars til rådighed, som omfattede langvarige forhandlinger med EU.
Alstom endte med at sælge sin elforretning til General Electric (GE) for 14 milliarder dollars i 2015. Det resterende selskab handler på de lyserøde ark som ALSMY.
En note af interesse:En af de franske regeringsrådgivere i GE-aftalen var Emmanuel Macron, som ville fortsætte med at blive præsident i 2017.
Hospitalsoperatør HCA Healthcare (HCA, $136,37) blev først offentliggjort i 1969 som Hospital Corporation of America. Derfra fokuserede virksomheden på en aggressiv M&A-strategi for at konsolidere industrien - og i sidste ende blive den dominerende spiller i branchen. I slutningen af 1980'erne tog ledelsen virksomheden privat og indledte derefter endnu en børsnotering i 1992.
Frem- og tilbage-aftalen fortsatte i 2006, da KKR &Co. (KKR) købte HCA ud for 21 milliarder dollars. Bare fem år senere ville KKR vende virksomheden tilbage til de offentlige markeder.
Der var nogle bemærkelsesværdige problemer med udbuddet, som opstod med navnet HCA Holdings. Der var en stor gældsbelastning på omkring 27 milliarder dollars og usikkerhed omkring Medicare-reglerne. Men takket være HCAs relativt stabile pengestrømme forblev Wall Street modtagelig for tilbuddet.
Virksomheden, som nu spænder over 178 hospitaler og 119 fritstående operationscentre i 20 stater og Storbritannien, skiftede navn til HCA Healthcare i 2017. Det er uden tvivl en vinder:HCAs aktier er mere end firedoblet fra deres udbudspris på 30 USD.
Primerica købte Travellers i 1993, først beholdt navnet og derefter tilpasset det til The Travelers Group. Det fusionerede senere med Citicorp for at blive Citigroup (C). Fusionsprocessen var dog stenet, og Travellers blev udskilt i 2002 i det, der på det tidspunkt var det største forsikringsudbud.
Virksomheden er vokset op gennem opkøb lige siden dets tilbud i 2002, herunder en fusion på 16,4 milliarder dollars med The St. Paul Companies, ved at bruge St. Paul-navnet indtil 2007, hvor det skiftede til The Travellers Companies – og det mest populære logo med rød paraply folk ved det i dag.
I dag er TRV en virksomhed på omkring 34 milliarder dollars, der er i top inden for husejerforsikringer gennem uafhængige agenter og top-tre inden for personlig forsikring.
A key to the success for the Blackstone Group (BX, $35.30), a private equity firm, has been its ability to anticipate major market cycles. So it should surprise nobody that Blackstone’s IPO was impeccably timed.
Blackstone went public near the peak of the private-equity boom, and a year before the financial crisis took hold.
The IPO was a big-time payday for the firm’s co-founders; CEO Stephen Schwarzman snagged $677 million, while Peter Peterson pulled down a cool $1.9 billion.
Blackstone Group has continued to be dominant in the PE world, boasting $439 billion in assets under management as of Q2 2018. Share performance has been underwhelming, gaining only about 14% from the IPO price, though investors have reaped considerable dividends since then, too.
In 1875, Isaac Elder Blake founded Continental Oil and Transportation Company, which was focused on oil, kerosene and other chemical products. He sold Continental to Standard Oil in 1884, but it was spun off in 1911 as part of a monopoly breakup.
Over the years, the company bulked up via acquisitions and eventually changed its name to Conoco. DuPont eventually acquired the company during the go-go 1980s takeover era, taking advantage of shares that were depressed because of a plunge in oil prices. But the companies weren’t a good fit, and Conoco was once again shed off, via an IPO.
The 1998 offering raised $4.4 billion – a record at the time. When Conoco went public, it was the sixth-largest oil company in the U.S., boasting a network of 7,900 gas stations.
Conoco eventually merged with Phillips Petroleum to form ConocoPhilips (COP, $72.59). The company today is the world’s largest independent exploration and production company (by production and proven reserves), with operations in 17 countries.
Conglomerate Tyco bought top business lender CIT in 2001, then tried unsuccessfully to sell it back off in early 2002. So, management switched gears and spinned it off with an IPO instead.
Wall Street wasn’t very enthusiastic about the CIT Group (CIT, $48.34) deal, in part because Tyco CEO Dennis Kozlowski had abruptly resigned a month earlier over reports he was being investigated over dodging taxes. The IPO priced below its original range, and the shares fell by 4% on their first day of trading. Still, the offering raised a hefty $4.6 billion … most of which was used to pay down Tyco’s massive debt load, which it accumulated because of an aggressive M&A spree.
The company eventually had to file for bankruptcy in late 2009 amid the financial crisis, and shareholders were wiped out. But CIT Group remained, albeit with a massive restructuring. Today, CIT Group is a Fortune 1000 company with about $50 billion in assets.
By summer 2000, American markets were under intense pressure from the dot-com bubble burst, but that didn’t deter Chinese telecom company China Unicom (CHU, $11.12). The company pulled off a $4.9 billion deal – at the time, the largest by a Chinese company – to list on the New York Stock Exchange, and even managed to gain 12% on its first day. (Shares also were offered in Hong Kong.)
China Unicom, the second largest telecom company in China at the time, was a division of state-run China United Telecommunications. CHU held about 14% market share, including strong footprints in Beijing, Shanghai and Tianjin. Half of its revenues came from paging.
The IPO hasn’t been a good long-term holding, however. The stock’s price has retreated 44% from their offering price of $19.99.
In 2000, German chipmaker Infineon Technologies (IFNNY, $20.78) wanted to get a piece of the dot-com action in the U.S. – and it worked. The deal was the second-biggest for a German company – second only to Deutsche Telekom (DTEGY) – and shares more than doubled, to $70 per share from a $33.92 offering price.
Infineon was a division of old-line industrial operator Siemens (SI) and was ranked No. 10 in the world among chipmakers, in terms of total sales. Siemens, by the way, had enjoyed dealmaking success a year earlier with an IPO of its Epcos division.
Infineon Technologies delisted from the New York Stock Exchange in 2007, but still trades on the Frankfurt Exchange, as well as over-the-counter in the U.S. It has a strong footprint in key markets such as self-driving vehicles and the Internet of Things. Its power and smart card ICs are No. 1 in market share, and the company is No. 2 in automotive semiconductor market share.
In 1907, James Casey created American Messenger Company, which offered parcel and special-mail service primarily by foot and bicycle. However, it upgraded its “fleet” with its first Ford Model T in 1913, and six years later, it took on the name we know it by now:United Parcel Service (UPS, $114.73).
UPS built a massive business without much need for outside capital. In fact, UPS didn’t go public until 1999 – compare that to rival FedEx (FDX), which was founded in 1971 and went public in 1978.
Demand for the UPS IPO was so robust that the deal had to be delayed by 45 minutes. Shares ended their first day of trading up $36%. And unlike many offerings, employees collected a nice windfall – they collectively owned about a third of the company’s shares.
The actual performance of UPS has been a little above-average, with gains of about 130% from its listing price versus 102% for the S&P 500.
Telecom Eireann was owned by the Irish government, which allocated a hefty 55% of the stock to individual investors. More than 500,000 people, or over 20% of Ireland’s adult population– 60% of whom were first-time investors – joined in.
The company, which was renamed Eircom, still was relatively small among the world’s telecom giants at the time, with 1.5 million phone lines and 645,000 mobile customers.
The company split into two divisions in 2000 – a mobile business and a fixed-line business. The mobile division sold out a year later to Vodafone (VOD) and a consortium of buyers.
Philip Morris International (PM), which had purchased Nabisco in 2000, spun off Kraft Foods in 2001, using much of the offering’s proceeds to pay down debt from the acquisition.
Kraft Foods at the time had a nice portfolio of brands, including Kraft Macaroni &Cheese, Maxwell House, Philadelphia Cream Cheese, Oreo cookies and Oscar Mayer. It also had an interesting leadership structures that included co-CEOs, and Philip Morris’ CEO was the chairman.
Nonetheless, the IPO spurred little investor interest, with shares rising just 1% on their first day of trading.
In 2012, Kraft announced it would split off its North American grocery business as Kraft Foods Group, with the remaining snack-foods company to be renamed Mondelez International (MDLZ). Three years later, Kraft Foods Group merged with Heinz to become Kraft Heinz (KHC, $55.54) in a deal facilitated by Warren Buffett’s Berkshire Hathaway and global investment firm 3G Capital.
The AT&T Wireless IPO came at the peak of the dot-com boom, as parent company AT&T wanted to capitalize on the frenzy. The deal was done by issuing “tracking stock.” This tracking stock essentially trades based on the performance of a company’s division, but doesn’t require the company to yield any control of the unit or spin off the division’s actual operations.
AT&T Wireless was growing at a fast pace, as were other mobile companies including Sprint (S) and Nextel. Revenues spiked by 41% year-over-year to $7.6 billion in 1999 and boasted 12 million subscribers. So no one was surprised when AT&T raised a then-record $10.6 billion, a year after UPS’ $5.5 billion raise.
AT&T Wireless eventually sold out to Cingular Wireless – itself a joint venture between SBC Communications and BellSouth, which were broken off from the original AT&T – in 2004 for $41 billion. SBC eventually took on the AT&T brand as AT&T Inc. (T, $32.50).
However, it was not immune to the financial crisis, and it in fact succumbed in June 2009, when it filed for bankruptcy. This included a $50 billion bailout from the federal government that sparked the nickname “Government Motors.”
But GM was able to get its house in order. The company worked aggressively to cut costs, streamline operations, revamp the lineup and invest more in the Chinese market. Resultatet? General Motors was able to launch a successful IPO a couple years later. It reduced its obligations to the U.S. government by $22 billion (and fully paid off the government by 2015), and it made a $4.7 billion profit in 2011 – its first positive annual earnings since 2004.
The stock, on a price basis, is actually in the red since its IPO. But that has created an income opportunity for new money, with shares yielding 4.9% as of this writing.
There was plenty of drama in the lead-up to the Facebook (FB, $154.92) IPO. Facebook’s prospectus noted that user-base growth likely would slow. The mobile side of the business was lagging. And CEO Mark Zuckerberg didn’t win any friends when he wore a hoodie to his investor presentation, leading many to believe he had a lackadaisical attitude toward the process.
The day-of was no better. Facebook’s deal pricing was delayed because of a Nasdaq glitch that resulted in roughly $500 million in losses across numerous Facebook investors.
The situation got worse in the next few months, as Facebook plunged below $20 per share.
Zuckeberg didn’t flinch. He swiftly focused on investing in mobile, including upgrading the original Facebook app and also making deals for image-based social media company Instagram and messaging service WhatsApp. Facebook more than recovered, hitting an all-time high above $218 earlier this year – a roughly 475% return on the original price.
The social media giant is facing new challenges, including a slowdown of its growth ramp, privacy issues and cybersecurity weaknesses. But it’s still one of the 10 largest companies trading on U.S. markets – not bad for a company that’s only been around since 2004.
Italian utility company Enel SpA (ENLAY, $4.89) had a few things weigh on its IPO – namely, it was a utility (which doesn’t tend to gin up excitement), and it was a foreign operation, which also tends to hurt interest.
Wall Street’s reception was an unsurprising yawn. Yes, Enel became the largest publicly traded utility in the world, but the company’s shares barely budged on their first day of trading, crawling ahead by just 0.33%.
Another interesting wrinkle:Enel was state-owned. The Italian government actually used the deal to bolster its treasury, as part of a wide-scale policy of privatization and attempting to adopt the euro.
But while the Enel IPO was the second-largest deal raise in U.S. market history, the stock never got much traction. By 2007, management chose to delist from the NYSE because of low trading volumes.
On March 16, JPMorgan Chase (JPM) agreed to buy Bear Stearns in March 2008 for a mere $2 per share – a 93% discount to the prior close (and a price that eventually would be moved up to $10 per share) – in a deal that involved a $30 billion loan from the Federal Reserve. It sent shockwaves across Wall Street, as investors started to worry about America’s largest financial institutions.
This was the environment Visa (V, $139.29) had to contend with when, a couple days later, it pulled off its IPO.
This was a gutsy move by management, who wanted to make a statement that Visa was in solid financial condition. Visa operated the world’s largest payments system and was owned by about 13,000 financial institutions. At the time, it had about 1.5 billion cards in use, compared to 916 million for rival MasterCard (MA). And Wall Street cheered the offering, driving V shares up 28% on their opening day.
Anyone willing to invest in Visa during this time is doing cartwheels today. Visa’s stock has jumped by roughly 1,160% from the offer price, including a 4-for-1 split in 2015.
Chinese e-commerce giant Alibaba (BABA, $142.02) launched in April 1999 with 18 founders including charismatic leader Jack Ma. Ma, a former English teacher, had little business or technology experience, but he did have a compelling vision:to create a massive marketplace where Chinese businesses could sell their wares in China as well as global markets.
Alibaba’s early days were challenging – funding was difficult to come by as tech companies were folding left and right in the dot-com bubble bust – the company still got traction and eventually built a powerful ecosystem. By the time it launched its 2014 IPO, the company was earning roughly $3.8 billion in annual net income, from 279 million active buyers.
Alibaba’s business has since spread to other areas such as cloud computing, digital media and even self-driving vehicles. That has driven a roughly 110% return in just four years, and turned Alibaba into one of the 10 largest U.S.-traded stocks by market cap.