The 5 Craziest IPO's, ever
While LinkedIn's 109% gain during their IPO left us scratching our heads, it really pales in comparison to what was going on during the tech bubble.
Here are the top 5 of that thankfully bygone era, may we never see that insanity again. Or at least, may we have the capital to exploit it.
#5: WebMethods – 508%
webMethods was a developer of XML-based software that helped companies transact over the internet. At the time, they were viewed as the in b2b and had Dell as an investor as well as partnerships with Microsoft and Oracle. Their shares dropped over 70% the following year. They’re still around though, one of the few survivors of the dot com bust as a part of SoftwareAG.
#4 Foundry Networks – 525%
Another survivor of the bust and one of the very few to have their shares trade over their IPO price after, Foundry was a maker of Ethernet and networking hardware which was later acquired by Brocade Communications Systems.
#3 theGlobe.com – 606%
Finally a fuckup. theGlobe.com was one of the first social networking websites and it drew a lot of attention when their IPO, initially priced at $9 a share, first traded at $87 and topped at $97. The CEO was famously filmed by CNN dancing on top of night club tables wearing leather pants saying "Got the girl. Got the money. Now I'm ready to live a disgusting, frivolous life." Shares dropped to 10 cents later that year. He now lives a disgusting, disgusting life as a movie producer.
#2 Exodus Communications – 637%
Exodus Comm. was an internet service and hosting provider for dot com companies like Google, Ebay, PayPal, and other big names. Awesome. Unfortunately for them, the rest were nothing but hyped–up negative cash flow corporations that went belly up during the bust, dragging them along the sector’s exodus into Chapter 11. They were acquired by Cable & Wireless shortly after.
#1 VA Linux Systems – 698%
And now we have the champ. VA Linux was the sole distributor and marketer of the Linux OS as well as their PC’s. CS First Boston valued the company at $1.2 billion, a massive amount at the time and shares were offered at $30. The opening trade was $299, jumping to $320 later until it settled at $239.25. Exactly one year later it closed at $8.49.
So there you have it, the craziest IPO’s of the tech bubble. Now if I only had a hot tub time machine and a couple million to spare…
Demand is a beautiful thing. F*** supply.
Wow that's harsh! In his defense, Stephan Paternot has written a best seller after the bust and is currently involved in an entrepreneurial venture related to film-finance. And honestly I have a feeling that most monkeys on WSO behave similarly during bonus season...
Wow dude you must be really thin skinned, was just poking fun at the guy.
Thanks for the list. Lots of people lived thru the Dot com bust, but they can't name a single company that was part of it. It wasn't microsoft or dell, it was these crap companies who went public before they could come up with a business model. I don't think that is what is going on now with linkdin, but I think it could foster that type of environment again.
What about Pets.com? I actually heard a story from a professor at Stern who was part of the review team and refused to continue after he asked where the shipping costs were factored into their valuation models. They couldn't answer, and the rest was history!
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