According to Renaissance Capital, there have been 913 IPOs that have come to the U.S. market since 2005. In that period, just nine companies have priced more than 25 percent above the high end of their original price range.
LinkedIn joined that exclusive list with its IPO today. Indeed, LinkedIn raised its price range by 30 percent earlier this week, and priced shares at $45, which was the high end of its range.
That allowed the company, a professional management networking website, to raise $353 million in its IPO.
LinkedIn shares opened at $83, up 84 percent from its issue price. It’s now trading up more than 130 percent in midday trade, rising to over $100.
According to IPOCentral.com, only Chinese Internet firm Qihoo 360 (QIHU) saw a better first-day return this year, soaring 134 percent on its first day back in March.
LinkedIn’s midday price now gives it a market cap of $9.7 billion. Putting that into perspective, the stock is now bigger than nearly 40 percent of the S&P 500.
Yes, bigger than stocks like AMD, NYSE Euronext, Clorox, Tiffany, Hershey, Chipotle, Abercrombie & Fitch, U.S. Steel (X) and many more.
Today’s jump in shares is not particularly unusual given LinkedIn’s strong demand and aggressive pricing. Many of the notable names in recent years that priced their IPO by 30 percent or more above their original price range also performed very well on their first day of trading:
- Under Armour (2005) up 95%
- OpenTable (2009) up 59%
- Lululemon Athletica (2007) up 56%
- IntercontinentalExchange (2005) up 51%
- A123 Systems (2009) up 50%
- NetSuite (2007) up 37%
Source: Renaissance Capital (link: www.renaissancecapital.com)
But CNBC’s By the Numbers took a look at how those same companies performed after one year of trading. Returns were much more mixed, especially when taking out the strong initial first day gains.
Stock Performance One Year After IPOs’ First Close
- IntercontinentalExchange (2005) up 144%
- Under Armour (2005) up 84%
- OpenTable (2009) up 29%
- Lululemon Athletica (2007) down 10%
- A123 Systems (2009) down 56%
- NetSuite (2007) down 75%