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Table of Contents

Where Are They Now? Checking in on 5 Big IPOs

Many American investors have been obsessed with initial public offerings (IPOs) since the dot-com boom of the late 1990s, and even that bubble's burst didn't curb their enthusiasm for long.

Some investors are in it for a quick buck but others want to get in on Day 1 and stay in for a company's earliest growth spurt. The big question is, how does that work out? Below, we look at the five biggest IPOs that launched in 2018.

First, cast your mind back to 2018. What made it such a great year for IPOs? Most of the year experienced very strong market conditions overall, making it an ideal time to go public. Corporate earnings set records for the second quarter as S&P 500 companies earned an average of $34.05 per share. Consumer confidence reached its highest levels in nearly 20 years by September. Then, the final weeks of the year erased the gains of the previous several months in the market and sent the S&P into losses for 2018 overall.

The five IPO companies below were the biggest of the year in terms of the overall size of the launch. We'll compare their launch-day close with their 2022 year-to-date (YTD) returns and their total returns since IPO through August 2022.

Key Takeaways

  • Spotify (SPOT) was the largest IPO of 2018, but it has since floundered, trading below its IPO price as of mid-2022.
  • AXA/Equitable (EQH), the financial and insurance giant debuted as the second-largest, and its shares have risen steadily since.
  • ADRs of foreign companies also made the top IPO list of 2018, with varying results.
  • As stock markets struggled through 2022, many of these once-high fliers have seen their stock prices tank.

1. Spotify Technology S.A. (SPOT)

  • Sector: Technology
  • IPO size: $26.54 billion
  • IPO first-day close: $149.01 (opened at $165.90)
  • YTD 2022 (thru August 2022): -49%
  • Return Since IPO (thru August 2022): -16.5%

The largest IPO on the list, the Swedish music streaming service Spotify Technology S.A. (SPOT) had an unusual method of going public. On April 3, 2018, the company decided on a direct listing, a sort of "non-IPO", in which the company sells shares directly to the public and without any brokers or banks to act as intermediaries. Essentially, the process allowed all existing investors, including company employees, to sell their shares to the public, and no new shares were issued in the process. While the company stated a pre-traded value of $132 per share, the opening price was 25.7% higher than expected and closed at $149.01 per share, 12.9% above expectation.

Spotify's IPO listing offered 55.7 million shares or ordinary stock.

2. AXA Equitable Holdings, Inc. (EQH)

  • Sector: Financials
  • IPO size: $2.75 billion
  • IPO first-day close: $20.34
  • YTD 2022 (thru August 2022): -8%
  • Return Since IPO (thru August 2022): +43.5%

On May 9, 2018, AXA Equitable Holdings offered 137,250,000 shares of common stock, priced at $20 a share. Raising more than $2.7 billion, AXA Equitable Holdings, Inc. (EQH) logged the second-largest IPO of the year. The company represents the American operations arm of the French insurance company AXA SA. Even given the massive haul, the AXA IPO reportedly fell short of its targeted share sale.

3. PagSeguro Digital Ltd. (PAGS)

  • Sector: Technology
  • IPO size: $2.27 billion
  • IPO first-day close: $29.25
  • YTD 2022 (thru August 2022): -47%
  • Return Since IPO (thru August 2022): -48%

Brazilian payment services company PagSeguro Digital Ltd. (PAGS) earned an estimated $2.3 billion in its IPO. The company offered more than 105 million shares at $21.50 each. PagSeguro, founded in 2006, is a major payment services company for small businesses across Brazil. It has set as one of its primary goals the support of a digital payment infrastructure to allow e-commerce to continue to grow in Brazil.

4. iQiyi, Inc. (IQ)

  • Sector: Consumer goods
  • IPO size: $2.25 billion
  • IPO first-day close: $15.55
  • YTD 2022 (thru August 2022): -12.5%
  • Return Since IPO (thru August 2022): -74.5%

On March 29, 2018, iQiyi, Inc. announced its offering of 125,000,000 American Depositary Shares (ADS) at $18.00 per share, each ADS represented seven Class A ordinary shares. Raising just slightly less than PagSeguro was Chinese video streaming service iQiyi, Inc. (IQ). The company earned about $2.25 billion through its IPO. However, the company's share price dropped significantly immediately after the offering. The Chinese Netflix competitor is a subdivision of Baidu, the producer of China's largest search engine. Although Baidu has now spun iQiyi off into its own entity, it retains majority ownership.

5. Pinduoduo, Inc. (PDD)

  • Sector: Technology
  • IPO size: $1.6 billion
  • IPO first-day close: $26.29
  • YTD 2022 (thru August 2022): -12.5%
  • Return Since IPO (thru August 2022): +100%

Yet another Chinese company launched a successful IPO in the U.S., earning it a spot among the biggest public offerings of the year. Pinduoduo inc. (PDD) IPO'd at $19 per American depositary share, offering a total of 85,600,000 ADS. As a result, the company raised more than $1.6 billion in its public offering. Pinduoduo is an online shopping platform that offers customers the chance to gang up to earn greater discounts from merchants. Pinduoduo managed to outpace other popular and highly-anticipated Chinese-U.S. public offerings around the same time, including that of Tencent Entertainment. Tencent earned about $1.1 billion in its IPO, just barely failing to make it onto the list of the top five IPOs of the year.

How Many U.S. IPOs Were there in 2018?

In 2018, a total of 214 companies went IPO in the United States.

What Was the Best Performing Stock in 2018?

In 2018, the mobile tech company Twilio (TWLO) gained 278.39%, making it that year's top performing U.S. stock.

What Was the Biggest IPO of All Time?

The largest IPO to date was the oil giant Saudi Aramco's public offering in December of 2019, which raised more than $25.6 billion.

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