The 5 Biggest U.S. IPOs of All Time
Could 2017 be the year IPOs make a comeback?
Last year was bleak for initial public offerings on U.S. stock exchanges with just 105 companies making their public debuts in 2016, a decline of nearly 40 percent from 2015, according to Renaissance Capital. It was the worst year for initial public offering activity since the 2009 financial crisis, according to the IPO research firm.
Why did IPOs vanish? Some say companies were able to access capital in the private market, while concerns about the presidential election and Brexit dampened enthusiasm for public offerings.
This year could be different. Positive returns from a few recent, high-profile IPOs might encourage other companies to go public themselves, according to a 2017 IPO outlook survey by BDO.
Related: Behind the Scenes of an IPO
While it’s too soon to tell whether those expectations will turn into a reality, now might be a good time to look back at some big IPOs of the past. Here’s a look at the top five biggest U.S. IPOs of all time:
1. Alibaba ($21.8 billion, 2014)
If you thought the biggest U.S. IPO was the public offering of an American company, you’d be wrong. Chinese Internet giant Alibaba holds that title.
U.S. consumers may not have been all too familiar with Alibaba prior to its IPO, but it was a household name in China, where it holds the title of the largest e-commerce company, with more transactions than eBay and Amazon combined.
Alibaba chose to list its American depository shares on the New York Stock Exchange (NYSE) after failing to meet the listing requirements of the Hong Kong stock exchange. At its $68 offering price, the e-commerce behemoth debuted with a market value of $168 billion, more than triple eBay’s value at the time. The stock surged 38% on its first day of trading. It was all good news for Alibaba’s founder, Jack Ma, who as the result of the IPO, became the richest man in China.
2. Visa ($17.9 billion, 2008)
March 2008 wasn’t the best of times for a financial services company to go public. Bear Stearns was on its last legs, concerns over the U.S. economy were mounting and 21 IPOs had just been pulled.
Nonetheless, credit card juggernaut Visa was able to raise nearly $17.9 billion, more than seven times the $2.4 billion its archrival MasterCard had raised in its IPO two years prior.
A portion of the proceeds of the offering was used to redeem shares held by a consortium of banks that owned Visa.
3. Enel Spa ($16.5 billion, 1999)
Alibaba isn’t the only foreign company in the top five. The third biggest U.S. IPO of all time, that of Enel Spa in 1999, wasn’t just of a foreign company, what with Enel being based in Italy, but of a foreign, government-owned business.
The Italian government sold a third of state-owned power company Enel, using the proceeds to pay down debt. The shares were listed on both the Italian Stock Exchange in Milan and the NYSE, and Enel became the largest publicly-traded electrical utility in the world.
For the next eight years Enel traded on both sides of the Atlantic, but in 2007 the company was delisted from the NYSE because of its low-trading volume.
4. Facebook ($16 billion, 2012)
The Wall Street Journal called it “one of the most anticipated IPOs ever.”
Back in 2004, Harvard student Mark Zuckerberg started Facebook out of his college dorm room. Just eight years later, the social networking company had more than 800 million users worldwide and had come to “define the social era of the Web,” the New York Times noted.
At an offering price of $38 a share, Facebook’s market value at the time of its IPO was $104 billion, which made it bigger at that time than more established companies such McDonald’s, Citigroup or Amazon.
But Facebook’s IPO is perhaps most remembered for the trouble it faced out of the gate. On its first day of trading, Facebook encountered trading problems on the Nasdaq stock exchange. Despite the anticipation leading up to the IPO, Facebook’s underwriters were forced to buy shares to prevent the stock from falling below its offering price.
5. General Motors ($15.8 billion, 2010)
Less than a year and a half after tumbling into bankruptcy, General Motors pulled off one of the biggest IPOs in U.S. history.
On Nov. 17, 2010, the newly revived automotive manufacturer became a public company again after being delisted from the NYSE in 2009. The next day, GM’s then-CEO Dan Akerson rang the opening bell at the NYSE as the sound of a Chevrolet Camaro’s revving engine was heard on the floor.
The biggest seller in GM’s IPO was the U.S. government. During the financial crisis, the automaker took a $50 billion bailout to stay afloat. The IPO was the first step taken by the U.S. government to recoup that investment. By 2013, the U.S. Treasury sold its last remaining GM shares.