The trick to a hot IPO is a ton of media coverage for a company selling an innovative product beloved by young people, early-adapters, and journalists, right? Well, the last few years have proven that theory is not really true at all.
As Twitter readies its IPO, with its low-key, journalist-excluding presentations to investors and a relatively small amount of stock available to skeptical investors, another company went public and had something reminiscent of all the IPO-craziness Twitter so hopes to avoid: a huge first day.
The Texas-based Container Store, which is raising $225 million in order to pay a dividend to its private equity owner and to pay down some debt, went public on the New York Stock Exchange today. The stock was priced at $18 and opened trading at twice that and closed at $36.20.
The interest among investors and a huge opening day isn’t unique to The Container Store — over the past year, there’s been a flood of retail and food IPOs, and investors can’t get enough. Two of the biggest first-day bumps have been restaurant chains that nary an investment banker or trendsetter would be seen at, Noodles & Company and Potbelly. Tech IPOs, however, can raise a huge amount of money, but have been hit or miss as far as investor excitement goes.
2. Potbelly — IPO price: $14; first-day close: $30.77; current price: $26.54
Potbelly had its IPO just last month, on Oct. 4, and booked a huge gain for its early investors just as the stock opened at $28.79. The company sold 7.5 million shares to raise $105 million.
4. Noodles & Co. — IPO Price: $18; first-day close: $36.75; current price: $43.92
Noodles & Co raised just under $100 million in June and was one of the most successful IPOs so far this year, at least for the company’s private investors.
6. Sprouts Farmers Market — IPO price: $18; first-day close: $40.11; current price: $45.34
This time, it’s a private equity-owned grocery store that goes bananas on its first day. Opening for trading at the beginning of August, the stock jumped 123% on the first day, netting a nice profit for Apollo Global Management, which still owned 45% of the company, and raised $333 million.
8. Zynga — IPO Price: $10; first-day close: $9.50; current price: $3.58
The online gaming company went public at the end of 2011, and while it had a slight pop on opening day to $11, it quickly became one of the internet’s biggest flops. It soon fell below its IPO price and its underwriting banks needed to buy up the stock to keep the price at a reasonable level. The company’s stock has since fallen even further and its founder, Mark Pincus, stepped down as CEO in July.
10. Yelp — IPO Price: $15; first day-close: $24.58; current price: $67.15
Yelp went public in March last year in a closely watched IPO that was seen by many as a chance for a social media company to do well in the light of the Zynga debacle. And it did. The company traded up 63% on its first day and is now sitting at four times its IPO price.
12. Groupon — IPO price: $20; first-day close: $26.11; current price: $9.93
The big opening day on Nov. 5, 2011, would be the highpoint for Groupon as the hottest — and at one point fastest growing — online business. Since then, the stock price has been more than cut in half and the company’s founder, Andrew Mason, was kicked out of his CEO job in February of this year.