The initial public offering (IPO) market died a brief death a couple of years ago at the height of the financial crisis, but has since come roaring back, causing either good fortune or pain and suffering to investors who play in this area of the market.

IN PICTURES: 5 "New" Rules For Safe Investing

The Winners
Motricity (Nasdaq:MOTR) went public at $10 per share in June 2010, and performed poorly at first, falling below its offering price and staying there for several months. The stock then took off in early October 2010, and has not looked back since, returning 220% to investors who bought in at the IPO and stuck with it. Motricity sells software and other products that allow phones and other devices to receive mobile data services.

HiSoft Technology (Nasdaq:HSFT) provides outsourced information technology and research and development services to other companies. The company was also a winner in 2010, returning 170% to investors that invested in the IPO in June at $10 per share. Like Motricity, HiSoft Technology moved sideways for a few months before jumping higher during autumn's stock market rally. The company recently reported its results for the third quarter of 2010, and increased revenues by 71% over the same quarter in 2009.

The Losers
One of the worst IPOs over the last 12 months was also a Chinese company. China Nuokang Bio-Pharmaceutical (Nasdaq:NKBP) went public in December 2009 at $9 per share. The stock has moved steadily lower since that time, hitting a recent low of $3.78 per share, and giving some unlucky investors a loss of 55%. China Nuokang Bio-Pharmaceutical recently reported net income of $1.4 million in the third quarter of 2010.

The most disappointing IPO to investors so far in 2010 has to be DynaVox (Nasdaq:DVOX), which makes speech generation equipment, software and services to assist people with disabilities. The company went public in April 2010 at $15 per share, and at first looked OK. After a series of disappointments, the stock hit a recent low of $3.95, giving investors at the IPO a loss of 72%.

Bottom Line
The market for IPOs is known for its volatility, and that became perfectly clear to investors in 2010, as some got wealthy and some took major hits to their portfolios during the year. (For more, see our IPO Basics Tutorial.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Investing News

    Latest Labor Numbers: Good News for the Market?

    Some economic numbers are indicating that the labor market is outperforming the stock market. Should investors be bullish?
  2. Investing News

    Stocks with Big Dividend Yields: 'It's a Trap!'

    Should you seek high yielding-dividend stocks in the current investment environment?
  3. Investing News

    Should You Be Betting with Buffett Right Now?

    Following Warren Buffett's stock picks has historically been a good strategy. Is considering his biggest holdings in 2016 a good idea?
  4. Products and Investments

    Cash vs. Stocks: How to Decide Which is Best

    Is it better to keep your money in cash or is a down market a good time to buy stocks at a lower cost?
  5. Investing News

    Who Does Cheap Oil Benefit? See This Stock (DG)

    Cheap oil won't benefit most companies, but this retailer might buck that trend.
  6. Investing

    How to Ballast a Portfolio with Bonds

    If January and early February performance is any guide, there’s a new normal in financial markets today: Heightened volatility.
  7. Stock Analysis

    Performance Review: Emerging Markets Equities in 2015

    Find out why emerging markets struggled in 2015 and why a half-decade long trend of poor returns is proving optimistic growth investors wrong.
  8. Investing

    Don't Freak Out Over Black Swans; Be Prepared

    Could 2016 be a big year for black swans? Who knows? Here's what black swans are, how they can devastate the unprepared, and how the prepared can emerge unscathed.
  9. Investing News

    Today's Sell-off: Are We in a Margin Liquidation?

    If we're in market liquidation, is it good news or bad news? That party depends on your timeframe.
  10. Investing News

    Bank Stocks: Time to Buy or Avoid? (WFC, JPM, C)

    Bank stocks have been pounded. Is this the right time to buy or should they be avoided?
  1. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  2. What is the formula for calculating EBITDA?

    When analyzing financial fitness, corporate accountants and investors alike closely examine a company's financial statements ... Read Full Answer >>
  3. How do I calculate the P/E ratio of a company?

    The price-earnings ratio (P/E ratio) is a valuation measure that compares the level of stock prices to the level of corporate ... Read Full Answer >>
  4. How do you calculate return on equity (ROE)?

    Return on equity (ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its ... Read Full Answer >>
  5. How do you calculate working capital?

    Working capital represents the difference between a firm’s current assets and current liabilities. The challenge can be determining ... Read Full Answer >>
  6. What is the formula for calculating the current ratio?

    The current ratio is a financial ratio that investors and analysts use to examine the liquidity of a company and its ability ... Read Full Answer >>
Trading Center