Last year was the worst for IPOs in the last 20 years

2015 was not a good year for a company to go public.

More than 70 percent of U.S. companies that held initial public offerings in 2015 are trading below their debut prices, a figure that included 9 out of the 10 largest IPOs, The Wall Street Journal reported last week.

Overall, 2015 was the worst year to have an offering in the last 20 years. IPOs issued in 2015 are down a median of about 25 percent as of Friday's close, which is worse than the IPO slumps that occurred in other market downturns.

Here's the annualized return (or year to date for companies that have traded for less than a year) for the nearly 4,000 IPOs on the Nasdaq and New York Stock Exchange since the beginning of 1995. If a company was sold or was delisted, the return is calculated using the price on the last day the security was listed.

Based on the median company, the most successful IPO class was 2002. That relatively small group of offerings included companies like Dick's Sporting Goods, Netflix and Veridian, an aerospace company that was sold to General Dynamics about a year after going public.

The class of 1998 had the highest average return. That includes, a Mark Cuban company that was sold to Yahoo only a year after its IPO for $5.7 billion, a return of more than 1,000 percent. The deal is considered by some to be one of the worst ever made for an Internet company, but counts as a stunning success for the IPO itself.

Compared to other downturns

Another way to rate each IPO class is by the percent of new offerings in each year that end up with a positive return. By both 12-month and six-month post-IPO measures, 2015 is comparable to the weak IPO classes in 2000 and 2008.

While IPOs initiated in 2008 were the weakest so far six months after each offering, that batch eventually recovered. In fact, in terms of overall return, the median IPOs in 2008 and 2009 were among the highest since 1995. If the market recovers, the class of 2015 could eventually mount the same sort of rebound.

The opposite was true for 2000, when companies like went public but were forced to sell at much lower prices within a few years.

There were fewer than 200 IPOs in 2015, compared to 275 in 2014. Companies have postponed going public almost entirely in 2016; only four have done so in February, and none did in January.

New companies are generally regarded as higher risk, so investors tend to flee during periods of market turbulence. Since the start of 2015, the Renaissance U.S. IPO index, which tracks the top 80 percent of new public companies (for two years after their IPOs), has fallen 19 percent while the S&P 500 was down about 6 percent (as of Monday's close).

Kathleen Smith, principal at Renaissance Capital, which manages IPO-focused exchange-traded funds, said the shutdown in the IPO market is the worst she's seen since the 2008 recession. That could easily change if the wider market recovers. The S&P 500 is up about 4 percent over the last week, and the Renaissance index saw a pop of 10 percent over that period.

"The market has to improve," Smith said. "If you look at what happened in 2008, the IPO market dropped, but once it started to pick up, the IPO window opened again."