Tech IPOs are incredibly high profile, and for good reason.
Companies who go public generally do so to gain more investor attention and more capital to fuel their growth.
And tech companies generate the most revenue of any type of IPO, many of which are worth billions of dollars.
Just look at Lyft’s 2019 IPO, which raised over $2.3 billion.
But under the surface, tech IPO returns aren’t all that impressive. In 2019, tech IPO returns averaged -4.6%… meaning IPO investors lost money.
Established tech companies, of course have been driving the market this year (the Nasdaq is up 28% in 2020). But IPOs have been lackluster.
The truth is… investors miss about 95% of potential gains when they invest in a public tech company.
And this just goes to show you why investing in early stage companies is the number one way to maximize your returns.
Just look at Facebook, for example.
No one can deny the grip Facebook has over the tech market. It’s a part of the famous FAANG group that has recently faced scrutiny for holding too much power in Big Tech.
The company’s most recent market cap is a mind-boggling $866 billion. That’s 27X Twitter’s $32 billion.
But despite their massive success now, Facebook’s May 2012 IPO day was a major flop.
Facebook began its first day trading at $38 per share… but by September, their shares had dropped to $17.55 – less than half their original worth.
Facebook would eventually shake off the ugly start. But it took 15 months for their shares to break even at $38 again.
These days, their shares are worth over $300. But it took almost seven years to reach that price.
IPO investors who stuck with the company still made a nice profit, although it some time. A $5,000 Facebook investment in 2012 would have been worth around $20,000 by the end of 2019… a 400% return.
That’s not bad, but look at it this way…
Imagine if you’d invested even $1,000, or even $100, into Facebook on day one, back when it was worth just $5 million.
You would have made a 16,200x return on IPO day, when the company was worth $81 billion.
That initial $1,000 would have been worth $16.2 million on IPO day.
That’s why we’re such ardent supporters of angel investing…
Because the next Mark Zuckerberg, Elon Musk, or Jeff Bezos is out there somewhere.
And since startup investing is way more accessible these days, you now have a shot at getting in on what could be the next Facebook, Google, Amazon… you name it.
That’s exactly what I’m out here to help you achieve over at the Angels & Entrepreneurs Network.
The research team and I work hard to connect our community with startup companies we believe have real potential to deliver incredible returns.
And you can get in on the ground floor of these companies and potentially start building generational wealth with just a couple hundred dollars.
Just click here to learn how.
Have a great weekend, and I’ll be back next week with another update.
Until next time,
Neil Patel
Companies who go public generally do so to gain more investor attention and more capital to fuel their growth.
And tech companies generate the most revenue of any type of IPO, many of which are worth billions of dollars.
Just look at Lyft’s 2019 IPO, which raised over $2.3 billion.
But under the surface, tech IPO returns aren’t all that impressive. In 2019, tech IPO returns averaged -4.6%… meaning IPO investors lost money.
Established tech companies, of course have been driving the market this year (the Nasdaq is up 28% in 2020). But IPOs have been lackluster.
The truth is… investors miss about 95% of potential gains when they invest in a public tech company.
And this just goes to show you why investing in early stage companies is the number one way to maximize your returns.
Just look at Facebook, for example.
No one can deny the grip Facebook has over the tech market. It’s a part of the famous FAANG group that has recently faced scrutiny for holding too much power in Big Tech.
The company’s most recent market cap is a mind-boggling $866 billion. That’s 27X Twitter’s $32 billion.
But despite their massive success now, Facebook’s May 2012 IPO day was a major flop.
Facebook began its first day trading at $38 per share… but by September, their shares had dropped to $17.55 – less than half their original worth.
Facebook would eventually shake off the ugly start. But it took 15 months for their shares to break even at $38 again.
These days, their shares are worth over $300. But it took almost seven years to reach that price.
IPO investors who stuck with the company still made a nice profit, although it some time. A $5,000 Facebook investment in 2012 would have been worth around $20,000 by the end of 2019… a 400% return.
That’s not bad, but look at it this way…
Imagine if you’d invested even $1,000, or even $100, into Facebook on day one, back when it was worth just $5 million.
You would have made a 16,200x return on IPO day, when the company was worth $81 billion.
That initial $1,000 would have been worth $16.2 million on IPO day.
That’s why we’re such ardent supporters of angel investing…
Because the next Mark Zuckerberg, Elon Musk, or Jeff Bezos is out there somewhere.
And since startup investing is way more accessible these days, you now have a shot at getting in on what could be the next Facebook, Google, Amazon… you name it.
That’s exactly what I’m out here to help you achieve over at the Angels & Entrepreneurs Network.
The research team and I work hard to connect our community with startup companies we believe have real potential to deliver incredible returns.
And you can get in on the ground floor of these companies and potentially start building generational wealth with just a couple hundred dollars.
Just click here to learn how.
Have a great weekend, and I’ll be back next week with another update.
Until next time,
Neil Patel
Follow @angelsandentrepreneurs
