As Haleon Flops on its Stock Debut – 10 More IPOs that Bombed on Day 1
As Britain’s FTSE 100 (see the derivative price) rose at the beginning of this week, largely thanks commodity stocks and an upbeat global mood, shares of Haleon, a spin off from drugmaker GSK, fell on their first day on the London Stock Exchange.
The pharmaceutical company was hoping to do much better.
Michael Hewson, Chief Market Analyst at CMC Markets UK said: “Haleon’s products range from the likes of Sensodyne toothpaste, as well as Advil and anti-indigestion tablets TUMS, which is just as well given that the valuation of £30bn is much less than the £50bn final bid by Unilever, which was turned down by the GSK board earlier this year. This makes the decision to hold out for today’s spin-off rather questionable.”
Mr Hewson added: “Unilever will be relieved at dodging that bullet. The shares have fallen further on the first day of trading.”
Haleon find themselves in good company. Here’s ten more debutants who failed spectacularly on their first day of trading:
World-famous mobility service provider Uber’s IPO didn’t come anywhere near its expected valuation of $120 billion when it hit Wall Street on its debut. The company aimed for a $45 per share price at opening, but after opening at $42, it dropped to $41 per share for the first day of trading.
One of the worst IPOs in decades came in September 2019, when SmileDirectClub debuted on the stock exchange. Initially priced at $23 per share, it opened at $20.55 per share and fell throughout the trading day. Ultimately, it ended the day 28% down.
TheGlobe’s IPO flop is one of the worst in IPO history. On the first day of its trading, stock jumped a staggering 600% in the first day of trading. That meant it raised $27.9 million in its IPO. But it was delisted by the NYSE less than two years later, after falling below $1 per share.
Online marketplace Etsy was one of 2015’s worst IPOs. Initially, the outlook was great – its stock price jumping from $16 to $27 on the first day of trading. However, the trend soon reversed with prices eventually falling below $10 per share. The stock has since shown to be decent, but Etsy is notable for being one of the worst-performing debut IPOs in recent history.
Telecoms company Vonage were sued over their IPO, as it was that bad. Three U.S. investment banks received fines from the Financial Industry Regulatory Authority in connection with the IPO. The initial valuation of $17 price point wasn’t ever close, with share prices tumbling, eventually bottoming out in the peak of the Great Recession at under $0.50 per share.
Biopharmaceutical firm Moderna opened up with an offer price of $23.00, it finished on $18.60. The drop on its IPOs first day came in at 80.87%. In June this year, shares in Moderna were selling at $15.67.
Groupon, the online-offer company is still around today, but their rapid slump is well known. The firm launched in 2008, just a few months before the global meltdown, and did well. The firm became the fastest to hit the $1 billion mark in sales history.
It did well over two years, and even rejected a takeover bid by Google (now Alphabet) who valued their stock at $6 billion. Groupon’s IPO was $20, opening to public trading at $28. But a little over a year later, its shares had slumped to just $5. Sales have slowed since then, with profits few and far between.
British online food delivery company Deliveroo was predicted to be a huge success when it went to the stock exchange. They thrived during Covid, experiencing a surging demand. Amazon even bought 16% of Deliveroo, such was their confidence in the company. However, their IPO proved to be the total opposite from initial predictions. Stocks slumped, closing at 26% below listing price and shaving $2 billion from Deliveroo’s market value. This made Deliveroo the worst-performing London debut for a major IPO in over twenty years.
Shanda Games are huge in the online gaming market. And the Chinese company, launched a US IPO back in September 2009. Initially, its shares went up from 63 million to 83.5 million, with a $12.50 opening share price. They raised a total of $1.04 billion which stands up as the largest American IPO of 2009 to date. However, and reportedly due to greed from the company’s underwriters, investor numbers plummeted fast, with the share price immediately dropping to 14%.
The online pet store had its IPO in 2000, and raised a very decent $82.5 million. But with a very dodgy business plan, it wasn’t near enough to make up for a leaky business plan. The stock went from a high of $14 per share at the IPO to a low of just 22 cents a share.
Pets.com was no more after only nine months after its IPO. Try its URL now, and it’ll redirect you to Petsmart.com.