An IPO is an initial public offering. When a company ‘goes public’ they are basically offering shares for the first time to industrial and individual investors. Anyone who has seen Wolf of Wall Street or read the book will remember the excitement the Steven Madden IPO caused on the markets, and there have been many companies that have caused quite a stir and churned out billionaires during their initial public offering. The public can then invest in the company either through their stockbroker or online like through a company like CMC markets.
Kraft Foods – $8.7 billion
If you live anywhere in the Western hemisphere, it’s likely you would have heard of Kraft foods. What you probably DIDN’T know, was that Kraft foods was actually owned by Phillip Morris, a company best known for cigarettes. In a great tactical move, they sold of parts of the company in 2001, but managed to still retain an 81% share in Kraft.
The initial 2001 IPO was worth $8.7 billion, and in 2007, under a different name, they sold off the remaining shares. This deal made a lot of noise at the time, as most IPO’s were from the failing tech market, and because the company still managed to keep so much power after the company went public.
AT&T Wireless – $10.6 billion
In 2000, the tech market was still enjoying the dotcom boom, blissfully unaware of the fate it was to befall around a year later. AT&T exercised precision strategy and timing and managed to go public before the 2001 technology market crash. It was the actual wireless arm of the company that AT&T made public, and in one day the IPO made $10.6 billion. Not bad for a days work, but they still had to sell off the company in 2004, despite a $70 billion valuation. It was short lived, and when they got it back they merged everyone under the simpler company name which is just AT&T for all subsidiaries.
Facebook – $16 billion
It really wouldn’t be a list of the most successful IPO’s if Facebook were not included. In what would either be a genuine change of heart, or a shrewd business move by Mark Zuckerberg, his reluctance to go public caused even more speculation when he did eventually decide to go for an IPO.
Although there were some technical glitches on the day, Mark soon cleared them up. Because of his initial denials that he would ever take the company public, everyone from hedge fund managers to small time hobby investors wanted a piece of the pie. Not one to rest on his laurels, Mark Zuckerberg used the $16 billion Facebook acquired during the IPO to buy competitors Whatsapp and Oculus.
Alibaba – $25 billion
You’ll be wondering why there is such a big IPO on this list for a company you probably haven’t heard of. Alibaba is the Chinese equivalent to eBay or Amazon, and is one of the largest online selling platforms in the world. Even if you haven’t heard of it, think about the sheer amount of people that use the internet in China.
The founder, Jack Ma, knew his companies worth, and when he failed to agree terms to float the company on the Hong Kong stock exchange, he did what any great businessmen would do – he took it to the New York stock exchange. Although the general public may not have all heard of Alibaba, but the investors knew a good deal when they saw one.
The Alibaba IPO raised $25 billion, making it the biggest IPO of all time, a record which still stands now even though it was in late 2014. The ABC bank, another Chinese company came close, their IPO was worth $22 billion, but there is yet to be anyone to beat Alibaba. Investors still see Alibaba as a solid investment – after all it is one of the largest online companies in one of the largest countries in the world, and the IPO also made it’s founder, Jack Ma, one of the richest men in China.