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Class Of 1997: 2 Decades After Their IPOs, Where Are These Companies Now?

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Class Of 1997: 2 Decades After Their IPOs, Where Are These Companies Now?
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Delivering on a promise is a tough proposition, and to consistently deliver requires excellence on all fronts. When companies offer their shares to the public in the form of an IPO, they do so by touting their financial strength, balance sheet solidity, market opportunity, strong competitive positioning, an efficient management team, viable strategy and resilience to weather any kind of adverse events, among other things.

If investors warm to the companies and the promises they dole out, they will flock to the companies in droves, and consequently, the IPO becomes a smashing hit.

Snap Holds Up Despite Q1 Hiccups

A case in point is the IPO of Snap Inc (NYSE: SNAP), the parent of ephemeral photo and video sharing social networking company Snapchat. The company offered 200 million shares in an IPO earlier this year, pricing the shares at $17 a piece, above the $14–$16 range they were marketed for. Opening at a premium of 41 percent over its IPO price on its IPO debut, Snap's stock currently trades at $20.74.

Though the recent lukewarm first-quarter earnings release threatened a break below the listing price, with the stock falling to $17.59 on May 11, it has managed to stay afloat.

Post-IPO performance of stocks depends on several factors, including:

  • Fundamental performance.
  • Economic conditions, including consumer spending, inflation, etc.
  • Fiscal policy.
  • Monetary policy.
  • Demographics.
  • Trends.
  • Market sentiment.

Benzinga looked at some high-profile companies, which IPOed their shares in 1997, in a bid to present their performance scorecard over a two-decade time horizon. Here is how the companies fared on their graduation after two decades.

One has to keep in mind that the gain or loss percentage is based on the adjusted closing price (adjusted for splits and/or dividends) on the day of its listing.

Class Of 1997

1. Amazon.com, Inc. (NASDAQ: AMZN)

    Date of offering: May 15, 1997

    Number of shares offered: 3 million

    Offer price: $18

    Gross proceeds: $54 million

    Gains/Loss: +48,800 percent

2. C.H. Robinson Worldwide, Inc. (NASDAQ: CHRW)

    Date of offering: October 15, 1997

    No. of shares offered: 10.58 million

    Offer price: $18

    Gross proceeds: +$190 million

    Gains/Loss: 1,130 percent

3. Childrens Place Inc (NASDAQ: PLCE)

    Date of offering: September 19, 1997

    No. of shares offered: 4 million

    Offer price: $14

    Gross proceeds: $56 million

    Gains/Loss: +663 percent

4. Ralph Lauren Corp (NYSE: RL)

    Date of offering: June 12, 1997

    No. of shares offered: 29.5 million

    Offer price: $26 Gross proceeds: $767 million

    Gains/Loss: +193 percent

5. TD Ameritrade Holding Corp. (NASDAQ: AMTD)

    Date of offering: March 4, 1997

    No. of shares offered: 2.35 million

    Offer price: $15

    Gross proceeds: $35.25 million

    Gains/Loss: +1670 percent

6. Cerus Corporation (NASDAQ: CERS)

    Date of offering: January 31, 1997

    No. of shares offered: 2 million

    Offer price: $12

    Gross proceeds: $24 million

    Gains/Loss: (-84.7) percent

7. Casella Waste Systems Inc. (NASDAQ: CWST)

    Date of offering: October 29, 1997

    No. of shares offered: 4 million

    Offer price: $18

    Gross proceeds: $72 million

    Gains/Loss: (-36.7) percent

8. Rambus Inc. (NASDAQ: RMBS)

    Date of offering: May 14, 1997

    No. of shares offered: 2.75 million

    Offer price: $12

    Gross proceeds: $33 million

    Gains/Loss: (-78.7) percent

Amazon: Graduating With Honors

Among the Class of 1997, Amazon is the standout performer, clocking in gains close to 49,000. Although Amazon's shares were offered at $18, the closing price of its debut day is taken as less than $2 to account for the three stock splits the company announced in the interim.AMZN Chart
Source: Y Charts

To make the situation more intelligible, a $1,000 investment in Amazon's IPO would have fetched 55 shares. Adjusting for the 2-for-1 split in June 1998, 3-for-1 split in January 1999 and the 2-for-1 split in September 1999, the original 55 shares would have multiplied to 660 shares.

Taking Monday's closing price of $957.97, the $1,000 investment would have grown into $632,260.

Meanwhile, there are other companies such as Rambus, Casella Waste and Cerus that have generated negative returns since their IPO. And there is a third category of companies, which have gone out of business (due to several reasons such as M&A, "busting", etc.) and into the oblivion.

Among the Class of 1997, Amazon stands tall and towering, as it goes from strength to strength.

Related Links:

The Basics of IPOs: Some Things You Should Know

3 Important Dates For All IPOs, Explained

Posted-In: Education Top Stories General Best of Benzinga

 

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