Last Updated on January 2, 2024 by BFSLTeam BFSLTeam
Interesting IPO success stories result from companies that go public for the first time in their history of operations. All eyes turn on a company that goes public for the very first time. This is when the previously held private company wishes to become public and gets listed on an exchange. To do this, a company launches an IPO or an initial public offering. People wish to see how companies perform after an IPO is launched and a company gets listed.
Every company is unique so every company launching an IPO has a different IPO story. You will find that some company stock surges after an IPO’s launch while others may take a while to gain some momentum. Nonetheless, there are enough success stories to write home about and these stories should be known by all investors.
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Interesting IPO Stories – What drives success?
You may wonder why only some companies see the joys of success and others don’t. In the IPO arena, timing is the key to success. A company that is financially sound may have its bearings but it also has to assess general market conditions. Take Zoom, for instance. Zoom Video Communications chose to go public in April 2019 just as the pandemic struck and remote work was the order of the day. What resulted was a stellar success for Zoom in the months to follow.
In IPO success stories, you will also find that a company’s innovation plays a large role. For example, when Peloton launched its IPO in the second quarter of 2019, its IPO witnessed success as the company brought a unique approach to the fitness ecosystem. With innovation comes a related concept, that of brand recognition. Companies, although private, may have become famous, like Uber, whose brand was already popular when its IPO came out in 2019.
Additional Read: Upcoming IPO in January 2024
Along with the factors that make a company a success, either before an IPO is launched, and more so after it is made available, is the sound financial aspect of the company. Companies that witness success are typically very robust financially.
Successful Six
Many companies have witnessed success in their IPO launches, and these include Uber, Peloton, and Shopify. Here are some successful IPO stories and you may recognise these behemoths as big businesses now:
One of the most loved social networks on the planet, it goes without saying that Facebook’s success is unprecedented. The company started in 2004, founded by Mark Zuckerberg and his Harvard fellow students. The IPO was launched in 2012. The IPO was one of the highest-valued IPOs in IPO history, valued at some $104 billion. It was so successful after its IPO launch (oversubscribed, forcing Facebook to increase the number of shares by 25%) that other companies still use it as a model for IPO success.
Initially, share prices were low following the IPO, but these came back to life when the company’s market capitalisation grew to $1 trillion in the year 2021. The acquisition of WhatsApp and Instagram has only led to the company’s rising success and substantial increases in revenue.
Alibaba
Interesting IPO stories come from all over the world and are as intriguing as the fairy tales they are named after. Take the Chinese-owned e-commerce giant, Alibaba as a prime example. Founded in 1999 by the erstwhile Jack Ma, the company was established to connect Chinese local manufacturers with international buyers. The company was already a hit before it went public in 2014. Shares went up 38% on the first trading day. The company raised an unheard-of amount – $25 billion. This was a jubilant response and has turned out to be one of the largest IPOs in the history of IPOs.
The company has been, and still is, marked by healthy financials, strong innovations, and a dominant market placement. Nonetheless, investors clamoured for the IPO due to the company’s distinctive business model (providing a platform for native businesses to sell products and not directly selling products) predicting its potential future rise to fame. IPO success stories have never been as good as Alibaba’s.
The veritable king of search engines, Google needs no introduction. Founded by Larry Page and Sergey Brin in 1998, the company was high on the popularity charts before its IPO launch in 2004. Sound finances aside, due to the company’s relevant impact on the internet and how users use the search engine, Google has become highly famous, and this is the main reason for its success. With algorithms that are constantly evolving, Google has changed the game of how people use it to search for and find information. Almost as if the search engine knows what you’re looking for, the company has introduced many innovations like voice search and tailor-made results to make searches easy. With innovations, advertising, and a strong corporate culture, the company is moving from strength to strength.
Netflix
Among the most adored streaming platforms in the world, Netflix offered its IPO in 2002. The company has witnessed success due to its major shift from physical to digital media, and its stand-out ability to create original content. It also uses the power of data to create a huge online library of shows, films, and documentaries, not to mention other media-driven content. Making this company more of a phenomenal post-IPO story is the fact that it has a wide reach and streams in an array of global languages.
Zoom Video Communications
While the pandemic took the steam out of people in the first half of 2019, Zoom put the energy back into communication which was so needed as people were locked indoors or in quarantine. The pandemic brought people together through Zoom, an easily navigable and usable video-conferencing interface. The pandemic may have ended, but with the new work-from-home culture and other uses, the platform is a go-to place for quick and easy communication from and to anywhere on earth.
Tesla
Another company that requires no fore-story, Tesla is an innovator that has spread its tentacles to many fields including electric cars, space travel, and more. Elon Musk, the future thinker and visionary who founded the company in 2003, is at the helm of a company that is more like a movement. With its revolutionary products and continuous innovation, the company was bound for success after its IPO in 2010. The success of the company is attributed to its focus on innovation, invention, design, sustainability, and constant change in its power to drive industry forces.
Additional Read: Why do companies go public?
Concluding Lines on IPO Success Stories
From the IPO success stories you have read about, and there are more besides these, there may be many lessons to be learned. The companies have key factors in common when it comes to their success, and these include a grasp of the market, a strong business model, and a clear way of thinking to achieve goals. Timing and having a solid business strategy are also important, not to mention the building of a sound brand and a concentration on growth.
FAQs
Some of the companies that have interesting IPO stories are Zoom, Facebook, Netflix, Tesla, Google, and Alibaba.
Factors that contribute to post-IPO success include robust leadership, innovation, a sound business model, good branding, and the ability to adjust to changes in the markets.
There are several companies that witness positive results after launching IPOs, but not all of them become great successes. Success is dependent on many factors including a company’s inherent qualities and the organisation’s fundamentals.
Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.
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