Class Of 2008 IPOs: Where Are They Now?

The IPO market is off to a lackluster start in 2019, with one culprit being the federal government shutdown — which halted public listings. 2018 was a better year for IPOs, with 190 companies going public and $47 billion in proceeds raised, about 32 percent higher than in 2017, according to Renaissance Capital data. 

The year saw a flurry of biotech IPOs and Chinese companies making a beeline to the U.S. market. Chinese issuances hit an eight-year high, headlined by Tencent Music Entertainment Group – ADR TME's $1.1-billion offering.

IPO returns have been anemic and have fallen under pressure from the global equity sell-off in the fourth quarter. Average IPO returns were a negative 2 percent and after-market returns were a negative 17 percent.

Even as we have come off a year characterized by strength in listings and proceeds but weakness in returns, Benzinga looked at the performance of some IPOs 10 years after their listing. Performance was calculated relative to the closing price of the final session of 2018.

Visa Inc Class A V

• Date of Offering: March 19
• Number of shares offered: 406 million
• Offer Price: $44
• Gross Proceeds: $17.864 million
• Gain/Loss: +1072.8 percent

ReneSola Ltd. SOL

• Date of Offering: Jan. 29
• Number of shares offered: 10 million
• Offer Price: $13
• Gross Proceeds: $130 million
• Gain/Loss: -98.16 percent

Grand Canyon Education Inc LOPE

• Date of Offering: Nov. 20
• Number of shares offered: 10.50 million
• Offer Price: $12
• Gross Proceeds: $126 million
• Gain/Loss: +701.44 percent

BioTelemetry Inc BEAT

• Date of Offering: March 19
• Number of shares offered: 4.5 million
• Offer Price: $18
• Gross Proceeds: $81 million
• Gain/Loss: +237.4 percent

Heritage-Crystal Clean, Inc. HCCI

• Date of Offering: March 12
• Number of shares offered: 1.914 million
• Offer Price: $11.50
• Gross Proceeds: $22.011 million
• Gain/Loss: +62.16 percent

Rackspace

• Date of Offering: Aug. 8
• Number of shares offered: 15 million
• Offer Price: $12.50
• Gross Proceeds: $187.5 million
• Gain/Loss: N/A

The company, a cloud services provider, was taken private by Apollo Global Management in August 2016 in a deal valued at $4.3 billion, or $32 per share. The per share value implied a return of 156 percent over the IPO price in a span of eight years.

Recently, a Bloomberg report suggested Apollo is seeking an IPO for Rackspace that values the company at $10 billion.

Riskmetrics

• Date of Offering: Jan. 24<
• Number of shares offered: 14 million
• Offer Price: $17.50
• Gross Proceeds: $245 million
• Gain/Loss: N/A

Riskmetrics, a provider of risk management and corporate governance products and services to the global financial community, was acquired by Msci Inc MSCI in June 2010 in a cash-and-stock deal valued at $15.5 billion or $21.75 per share, roughly a 24.3-percent gain over the IPO price.

Visa Paid Off

Among the class of 2008, Visa has generated the highest returns for investors. Its more than 1,000-percent return since the IPO beats the roughly 71-percent return for the S&P 500 over the same time period. 

The stellar showing by Visa's shares reflect its strong business fundamentals. The company's business model of generating revenues from fees for transactions it facilitates has fueled its growth, and it has gained momentum with the spurt in e-commerce sales.

Despite the stock's heady valuation, analysts still feel there is room for upside, as evidenced by the average analyst recommendation of Buy.

Related Links:

The Unicorns Most Likely To Test IPO Waters In 2019

A Global IPO Report Card For 2018: US Holds Up, China Dominates In Cross-Border Listings