Biggest ip os flops in history

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Read through to learn about the Biggest IPOs Flops in History. They were the IPO’s once considered to be hot and people bet on their successes but unfortunately market conditions, investor sentiments …

Read through to learn about the Biggest IPOs Flops in History. They were the IPO’s once considered to be hot and people bet on their successes but unfortunately market conditions, investor sentiments and various other factors caused their demise.

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  • 1. Biggest IPOs Flops in History
  • 2. • IPO or “Initial Public Offering” is where a private firm decides to transform itself into a public one. • Companies go for IPO’s mainly to infuse cash in their capital structure for proposed expansion, increase their market share, and give a push to their profits. • A significant amount of planning goes into getting the IPO into reality and many times in the past there have been disastrous IPO cases that were launched only to be dished out within some time.
  • 3. IPO Flop- Vonage • Vonage is a voice over IP network and Session Initiation Protocol (SIP) Company that offers telephone service via a broadband connection. • Due to huge losses in 2006 they decided to go public for required capital infusion. • Vonage decided to offer 13.5% of the IPO shares to its customers. But strangely this tech company was caught up in a technical glitch. • Shares were offered at $17 per share but quickly rushed 12.7% within the day to close at $14.85.
  • 4. IPO Flop- Pets.com Pets.com was a company based in San Francisco that sold pet products online. • They had tough time generating profits for their online pet supply as customers didn’t seem keen in waiting for their pet foods or other things to arrive. • They were selling products at a cost less than it took to produce them and also undercharged shipping costs. • They went public in February 2000 and raised $82 million! • The share price started at $11 per share elevated to $14 but the success was short lived and it crashed at meager 22 cents.
  • 5. IPO Flop- Webvan • Webvan had a great unique idea of delivering groceries without you having to carry the heavy grocery bags and take the pains to take them back home. • With the IPO in 1999 they raised a good enough $375 million and the stock price doubled on the first day itself. • The great idea lost its charm against the whopping logistics cost it had to bear. • Just after 18 months of its flaring IPO it declared bankruptcy
  • 6. • VeraSun Energy was known as a leading producer of renewable fuel and one of the topmost producers of ethanol during the ethanol boom. • Verasun went public and successfully raised $420 million in June 2006 • Market for ethanol production completely sunk with the number of competitors and the rush in the price of corn during recession diminished the demand for ethanol. • Within two years the company filed for bankruptcy . IPO Flop- VeraSun
  • 7. • Shanda Games is a huge name in online gaming market of China. • Shanda decided to go for an U.S. IPO in 2009 and raised an extraordinary $1.04 billion. • Inappropriately greedy underwriters had actually pushed the share price at a limit of $12.50. • It attracted investors who were ready to pay the top dollar. But since there were no new investors left later the stock price hit the bottom falling 14% in value to $1.75 the very next day. IPO Flop- Shanda Games
  • 8. Knowledge is like a line with no ends… To know more on this topic click on the link below http://www.educorporatebridge.com/IPO/biggest- ipos-flops-in-history/
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