
2018 was an exciting year for the stock market as many companies chose to go public through Initial Public Offerings (IPOs). These IPOs were highly anticipated, and the results varied—some companies soared, while others struggled. In this article, we’ll explore companies that had their IPO in 2018, focusing on seven that stood out for either their incredible success or shocking failures. Whether you’re an investor, a business enthusiast, or just curious about the world of finance, you’ll gain valuable insights from these real-life examples.
1. Spotify: One of the Most Notable Companies That Had Their IPO in 2018
The New Approach to Going Public
When Spotify went public on April 3, 2018, it didn’t follow the traditional IPO process that most companies follow. Instead, Spotify opted for a direct listing, which is a less common approach. In a direct listing, companies bypass the usual underwriters and don’t raise new capital by issuing shares. Instead, they offer existing shares directly to the public.
This innovative move made Spotify’s IPO stand out from the crowd. The company had been around for over a decade and was already valued at $26.5 billion before its listing. In the early days, Spotify’s stock price fluctuated significantly, with some investors wondering whether the direct listing would be a success.
However, over time, Spotify found its footing in the market. The music streaming giant continued to grow and expand its subscriber base. By 2019, Spotify’s stock had climbed to over $160 per share, a major success story despite the initial bumps.
Key Takeaways:
- IPO Type: Direct Listing
- Initial Stock Performance: Volatile at first, but stabilized and rose
- Current Position: A dominant player in the streaming industry
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Dropbox: A Strong IPO Among Companies That Had Their IPO in 2018
A Strong IPO Debut
Dropbox, the popular cloud storage company, went public on March 23, 2018, raising $756 million in its IPO. This was one of the most anticipated IPOs of the year, as Dropbox had grown significantly since its founding in 2007. The company offered users a simple solution for file storage and sharing, and its IPO raised significant attention.
Dropbox’s stock opened at $29 per share, which was higher than its initial pricing of $21-$23. This strong debut signaled confidence in Dropbox’s ability to succeed in the cloud storage market. Though the stock price faced some fluctuations after the IPO, Dropbox has since established itself as a major player in the cloud storage sector.
However, Dropbox has faced challenges in maintaining growth rates that match its early excitement. The company continues to compete with tech giants like Google and Microsoft, but its focus on user-friendly design and advanced features has helped it maintain a loyal customer base.
Key Takeaways:
- IPO Type: Traditional IPO
- Initial Stock Performance: Strong debut with initial gains
- Challenges: Ongoing competition in the cloud storage market
3. Pinduoduo: The Chinese E-Commerce Giant’s Rapid Rise
A Surprising Success in the E-Commerce Space
Pinduoduo, a Chinese e-commerce platform, made waves when it went public in 2018. The company raised $1.6 billion in its IPO, a remarkable amount for a relatively young player in the market. Pinduoduo’s unique business model focuses on group buying, where users can buy products in bulk with friends or family to get discounts.
The company’s innovative approach to online shopping resonated with consumers in China, and it quickly gained popularity. By the end of 2018, Pinduoduo had already reached a valuation of $24 billion, and its IPO was widely regarded as a success. The company had over 300 million active users by the end of that year, making it a fierce competitor to established players like Alibaba and JD.com.
While Pinduoduo faced criticism for its focus on discounting, its ability to cater to budget-conscious consumers in China helped the company thrive. Its stock price continued to rise after its IPO, reflecting the strength of its business model and growth potential.
Key Takeaways:
- IPO Type: Traditional IPO
- Initial Stock Performance: Raised $1.6 billion and continued to rise
- Market Position: One of the leading e-commerce platforms in China
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4. Uber: A Highly Anticipated IPO That Struggled
Uber’s Bumpy Ride to the Stock Market
One of the most highly anticipated IPOs of 2018 was Uber Technologies, the ride-sharing giant. Uber had revolutionized the transportation industry, and its IPO on May 10, 2019, was expected to make waves. However, Uber’s debut did not go as smoothly as expected.
Uber raised around $8.1 billion in its IPO, but its stock price faced significant declines shortly after it went public. The company’s valuation of $82 billion was questioned by many investors who were skeptical about Uber’s ability to achieve long-term profitability. At the time, Uber was still operating at a loss, despite its massive market share.
While Uber remains a dominant player in the global transportation sector, its stock performance post-IPO was a stark reminder of the challenges that tech companies face when they transition from private to public ownership. Uber has since made efforts to improve profitability by expanding its services beyond ride-sharing, such as food delivery (Uber Eats).
Key Takeaways:
- IPO Type: Traditional IPO
- Initial Stock Performance: Struggled after debut, stock price declined
- Challenges: Profitability concerns, regulatory hurdles
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5. Lyft: Uber’s Rival Faces Similar Challenges
Lyft’s Struggles to Maintain Momentum
Just a few months before Uber’s IPO, its main competitor Lyft went public on March 28, 2019. Like Uber, Lyft had a highly anticipated IPO, but its performance was less than stellar. The company raised $2.34 billion in its offering, but its stock price also experienced significant declines shortly after the debut.
Lyft, like Uber, was facing questions about its ability to achieve profitability in an increasingly competitive ride-sharing market. Both companies were facing challenges from regulatory authorities, competition from other companies like Lyft’s biggest rival Uber, and growing concerns over the future of self-driving cars.
Despite these challenges, Lyft remains a key player in the U.S. ride-sharing market. However, like Uber, it continues to face significant pressure to turn a profit.
Key Takeaways:
- IPO Type: Traditional IPO
- Initial Stock Performance: Struggled post-IPO, stock price declined
- Challenges: Profitability concerns, competition from Uber
6. Pinterest: A Social Media IPO That Delivered
The Social Media Success Story
Another successful IPO in 2018 came from Pinterest, the social media platform known for its image-sharing and idea-discovery features. Pinterest went public on April 18, 2019, and raised $1.4 billion in its offering.
Unlike some of the other tech IPOs, Pinterest had a different focus: it generated revenue primarily through advertising and had established a loyal user base. The platform’s unique appeal to both consumers and advertisers made it a strong IPO candidate.
Pinterest’s stock price initially rose, and it saw steady growth after going public. The company’s user base continued to grow, and it became a prominent player in the social media and advertising space. Pinterest’s IPO can be considered one of the brighter success stories of the year.
Key Takeaways:
- IPO Type: Traditional IPO
- Initial Stock Performance: Strong debut and steady growth
- Long-Term Success: Continued growth and success in the advertising space
7. Theranos: A Failed IPO That Shocked the Industry
The Cautionary Tale of Theranos
While Theranos did not have an IPO in 2018, its scandalous rise and fall still impacted the IPO market. Founded by Elizabeth Holmes, Theranos promised to revolutionize blood testing, but it turned out to be a massive fraud. The company raised hundreds of millions of dollars, and at one point, it was valued at $9 billion.
Theranos was one of the biggest IPO failures of all time, not because it went public but because of the fraud that led to its collapse. The scandal made investors and the public wary of biotech companies and highlighted the importance of thoroughly vetting companies before investing.
Theranos’ failure led to increased scrutiny of the IPO process, especially in industries like healthcare and biotechnology.
Key Takeaways:
- IPO Type: Not an actual IPO, but a huge failure
- Fraud: The company’s claims were false, leading to its downfall
- Industry Impact: Increased scrutiny of biotech IPOs
Frequently Asked Questions (FAQ)
1. What is an IPO?
An IPO (Initial Public Offering) is when a private company offers its shares to the public for the first time, raising capital from external investors.
2. Which IPOs were the most successful in 2018?
Some of the most successful IPOs in 2018 included Spotify, Pinterest, and Pinduoduo.
3. What went wrong with Uber and Lyft’s IPOs?
Both Uber and Lyft faced challenges with achieving profitability, and their stock prices fell after their IPOs, indicating investor concerns over long-term financial sustainability.
Conclusion
2018 was a memorable year for IPOs, with both successful and unsuccessful stories shaping the market. Companies that had their IPO in 2018, like Spotify, Pinterest, and Pinduoduo, showed that with the right strategy, IPOs can lead to long-term success. On the other hand, companies that had their IPO in 2018, such as Uber and Lyft, demonstrated the difficulties that tech companies can face when transitioning from private to public status. Meanwhile, Theranos serves as a cautionary tale of how IPOs can go terribly wrong, especially when fraud is involved. Each of these companies offers valuable lessons for future IPOs and investors looking to navigate the unpredictable world of stock markets.
Investors should always be cautious when navigating these waters. If you’re looking for other situations where caution is key, such as dealing with potential risks, like a black widow spider, you can check out our guide on Should I Kill a Black Widow Spider?.
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