An initial public offering (IPO) is when a private company sells stock to the public for the first time. They are used by smaller companies as a way to raise capital and market-awareness, but it also can be used by large private companies that are looking to become publicly traded.
At some point in time, all the large publicly traded companies on the market today launched IPOs, but have you ever wondered what they started trading for? Or how rich you would be if you were able to get in on the ground floor with an investment on their first day of trade?
Below are 3 companies who are now worth much more than they were when they first launched, whose IPOs you probably wish you were able to go back and invest in.
Chipotle Mexican Grill Inc. (CMG - Free Report)
Chipotle Mexican Grill Inc. launched its IPO in 2006 on the New York Stock Exchange (NYSE). The company’s IPO was priced at $22 per share, and on the first day of trade share prices doubled, closing at $44 per share. CMG’s all-time high price as of now was $742.23 in the summer of 2015 before food safety issues dropped the company’s revenues, earnings, and share price.
Chipotle now trades for more than $400 a share, and as of close on July 13th’s closing price, if one was to buy 100 shares of CMG on its first day of trade, that investment would now be worth $40,834. What started as a make-your-own burrito restaurant founded by Steve Ells in Colorado turned into a fast-casual giant whose fresh ingredient-filled burritos caught on like wildfire, making it a company most of us wish we could’ve invested in several years ago.
Starbucks Corporation (SBUX - Free Report)
Starbucks Corporation went public in 1992, with its first shares being offered at $17 each. Adjusted for stock splits, the initial price would’ve actually been $0.27. If you were able to purchase 100 shares on the first day the company started trading publicly, your investment would now be worth $370,176, using July 12th’s closing price. This figure isn’t including dividends either, which the company has been paying since 2010.
Starbucks is a household name in the coffee industry, and there’s likely one near you at all times, especially in bigger cities. The company continues to be successful and constantly expanding, opening thousands of new stores every year,especially in international markets. Starbucks has said it plans to eventually expand to 30,000 stores globally, and continue to expand its menu, which should help to continue the company’s history of success.
Amazon.com Inc. (AMZN - Free Report)
Amazon.com Inc. has been one of the hottest stocks in the last few years, but it hasn’t always been so. The company debuted on the NASDAQ for a price of $18 per share in 1997. If you were able to purchase 100 shares of Amazon on its initial day of trade, you’d be one happy investor. Thanks to 3 separate stock splits, your 100 shares would be now be 1,200 shares, and the initial investment of $1,800 would now be worth a whopping $897,852, based on July 12th’s closing price.
Amazon has been one of the best performing stocks since the beginning of 2015, and continues to be successful. The company continues to grow its ecommerce and cloud businesses, and both continue to improve revenues and profits. Amazon has already produced an incredible return since its initial launch, but it looks like that return isn’t ceasing to grow any time soon.
Companies continue to launch IPO’s every year, and investors are always watching to see if they can find “the next Amazon” in the tech industry or “the next Chipotle” in the restaurant industry. The three companies above have performed extremely strong since their initial public offerings, and their returns continue to grow. All 3 are still very relevant investment options, as they continue to expand in what they do, what they offer, and where they do business. I think it’s fair to say, if time travel were possible for investors, the day and year of these IPOs might very well be at the top of their lists of most sought after destinations.
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