When a company offers its stock on a public exchange for the first time, this is known as an Initial Public Offering or an IPO. IPOs provide businesses with instant liquidity and publicity, whilst also offering opportunities for early investors. Recently, some of the biggest returns on investment (ROIs) have been coming from tech companies like Facebook, Google, and Apple who have all seen impressive growth since floating.
When Apple had its initial public offering on the 12th of December, 1980, very few people owned a computer and you could have snapped up a share at just $22 (although you’d have needed to be quick because they sold out in minutes). Today, a single share would fetch over $200, so if you’d have purchased 100 shares that December, you could sell them now for over $20,000. However, when it comes to missed IPO opportunities, it’s not Apple that takes the crown…
Recently, Amazon.com Inc hit $1 trillion in market value, the second company to do so after Apple achieved the four comma valuation in early August. However, Amazon stock has not always been the ‘must have’ investment that it is today. Since its IPO over two decades ago, its share price has increased from $18 to almost $2000, meaning if you’d have invested in 100 Amazon shares in 1997, you could sell them today for almost $180,000. If you wanted to get a little deeper, you could have seen a Compound Annual Growth Rate (CAGR) of over 24%.
Obviously, when it comes to stocks and shares, it’s impossible to know which companies will perform and which won’t, even past returns do not predict future results. But, when you find yourself thinking ‘why didn’t I invest in Amazon?!’, just remember that even investment mogul Warren Buffett didn’t see sure value in the retail giant when it first floated. Last year, at Berkshire Hathaway’s annual meeting, self-made billionaire Buffett said “I’ve watched Amazon from the start. I think what Jeff Bezos has done is something close to a miracle … The problem is when I think something will be a miracle, I tend not to bet on it … I was too dumb to realize. I did not think [Bezos] could succeed on the scale he has.”
So, if you’re wondering which top tech IPOs have (so far) proved the most profitable, take a look at the graph below where RS Components have compared the value of 100 shares now and then for some of the biggest tech giants like Apple, Google, Netflix, and Facebook.
