REVEALED: The most disappointing IPOs ever
Following Facebook's disastrous flotation, Arabian Business counts down some other notable IPO flops
Share price change in first five days of trading: 4.2 percent
\nHCA Holdings, America’s largest for-profit hospital chain, sold more shares than planned during its March 2011 IPO. The Tennessee-based firm sold 126.2 million shares for US$30 each, raising around US$3.79bn. Shares in the firm increased 4.2 percent during the first five days of trading, according to Bloomberg data.
Share price change in first five days of trading: 1.8 percent
Kinder Morgan’s 2011 IPO raised US$2.86bn, marking the largest US energy initial public offering since 1998. The energy-pipeline firm sold 95.5 million shares of stock at US$30 a share, above the estimated range of US$26-$29. Shares in the company increased four percent in their trading debut, finishing the first five days 1.8 percent up. Kinder Morgan was taken private in 2007 in a buyout led by the company’s founder, Richard Kinder. At the time, the US$22bn transaction ranked as the largest leveraged buyout in 17 years.
Share price change in first five days of trading: 1.5 percent
\nGeneral Motors’ IPO in November 2010 was at the time the largest initial public offering in US history. The firm raised US$20.1bn after pricing shares at the top of the proposed range in response to huge investor demand. The start of trading marked the first stage of a turnaround following the automaker’s 2009 bailout by the US government. Shares in the firm finished the first five days of trading up 1.5 percent.
Share price change in first five days of trading: 0.2 percent
Insurance firm Genworth Financial’s IPO was the largest of 2004 generating proceeds of US$2.83bn and topping Google’s highly publicised sale. The insurance firm, which was spun off from General Electric, saw its shares decline as much as three percent below their already-reduced price on its first day of trading. Five days later the share price finished up \n0.2 percent. Today, Genworth Financial has over US$100bn in assets and employs around 6,000 people with a presence in more than 25 countries.\n
Share price change in first five days of trading: -0.5 percent
Financial difficulties at CIT Global forced the firm to sell itself to Tyco in 2001. Parent company Tyco planned to use the proceeds of the US$4.6bn IPO in July 2002 to pay down US$27bn in debt but stock plummeted four percent in its first day of trading. Analysts’ cited a blurred perception of the IPO for the 0.5 percent decline during the first five days of trading. The company declared bankruptcy in November 2009 but following a pre-packaged bankruptcy deal continues to trade on the NYSE. (Getty Images)
Share price change in first five days of trading: -4.2 percent
Shares of the Blackstone Group soared more than 13 percent on its first day of public trading back in June 2007. The New York-based global asset manager’s market value reached around US$40bn after what was then the biggest US IPO in five years. But the celebrations didn’t last long; shares declined 4.2 percent in the first five days of trading. (Pictured: CEO, Stephen Schwarzman).
Share price change in first five days of trading: -10.4 percent
MF Global, the futures and options business of Man Group, was the second biggest IPO of 2007 on the New York Stock Exchange, raising US$2.9bn. Shares slumped to US$30 from an expected price of US$36-$39 in its first day of trading and continued to decline, falling 10.4 percent during its first five days. Analysts attributed the decline to other IPOs of financial-fund related companies such as Blackstone Group and Fortress Investment Group. The firm filed for Chapter 11 bankruptcy in October 2011.
Share price change in first five days of trading: -13.1 percent
Social network Facebook listed in May 2012 in one of the largest initial public offerings (IPO) in US history. Despite the hype surrounding the California-based company’s listing, shares in the firm declined 13.1 percent during the first five days of trading, making it officially the largest IPO flop in the last decade. The company has struggled with technical glitches and a communications breakdown, both of which have seen the stock plummet nearly 23-percent since May 18. \n (Bloomberg)