How past tech floats fared, and upcoming IPOs in London

Even Facebook and Google had their troubles when they first went public, so Deliveroo’s bad experience is far from unique

Amazon listed on the Nasdaq at $18 a share with a market value of $438m in 1997, when it was just an online bookseller, with 256 employees. The share price rose gradually over the years, but started to rocket in 2015 after the firm posted substantial profits. Three years later, it became the world’s second trillion-dollar company, just weeks after Apple reached that milestone, and Amazon boss Jeff Bezos became the world’s richest man. Amazon is now worth about $1.6tn, with its shares trading at $3,161 last week.

Google’s IPO in August 2004, six years after it was founded by Sergey Brin and Larry Page, valued it at $23bn, well below the $39bn achieved by rival Yahoo. Google had been forced to cut its float price by almost 40% and halve the number of shares being sold when the process was mired in controversy by technical mishaps, an interview with the founders published in Playboy and other IPO rule breaches. Shares in Google, now Alphabet, started trading on Nasdaq at $85 and rose to more than $100 on their first day. They are now worth $2,129, valuing the company at $1.4tn.

Facebook made its much-hyped $104bn stock market debut in May 2012. Shares in the social networking company jumped by nearly 15% initially but ended their first trading day just a few cents above the $38 offer price. It was talked of as the most disastrous IPO in history and lawsuits were filed against the company. Facebook argued that technical glitches on the Nasdaq had damaged confidence, but fund managers blamed the last-minute decision to increase the number of shares sold. The shares fell steadily for several months before beginning their long rise, and are now worth almost $300, valuing the firm at around $850bn.

Uber suffered a humiliating first day of trading in May 2019, when investors gave the taxi-hailing app a frosty welcome and sent the shares more than 7% below the $45 launch price – which was already 20% lower than the business had hoped to list at. Shares in the loss-making company, which has since branched out into other areas, such as food delivery, have risen 670% since then, valuing the firm at $105bn.

Snap, which owns the instant messaging app Snapchat, went public in March 2017, and saw its shares soar 44% on their first day of trading, valuing the company at $28bn. This has since leapt to $81bn, an eye-watering sum for a business that was set up in 2012 by two twentysomethings, and which is still loss-making. The float catapulted the founders, Evan Spiegel and Bobby Murphy, into the top tier of tech billionaires.

Upcoming floats on the London Stock Exchange

Oxford nanopore’s gene sequencing
Oxford nanopore’s gene sequencing kit is now used to track Covid variants worldwide Photograph: Oxford Nanopore

Oxford Nanopore is a 2005 startup spun out from Oxford University whose Covid test was snapped up by the UK government and whose DNA sequencing kit is used to track variants of the virus globally. It plans to list in the second half of this year in what is expected to be one of London’s biggest debuts, with a valuation of up to £7bn, which is set to make its three scientist founders into multimillionaires.

PensionBee, an online pension provider, has announced plans to float, with an estimated market value of £350m. The firm, which helps savers consolidate all their pensions into one new plan, hopes to sell shares to institutional investors as well as its 130,000 active customers. Chief executive Romi Savova, a former Morgan Stanley banker, set up the business in 2014 and owns 44%.

Darktrace, a Cambridge-based cybersecurity firm backed by the tech entrepreneur Mike Lynch, is aiming for a stock market debut that values it at more than £2bn.

Trustpilot, the online review website headquartered in Copenhagen, has picked London for its planned £1bn listing. Other mooted tech listings include the resale site Music Magpie and the money transfer firm Wise, formerly known as TransferWise. And EDF is reportedly looking to float the electric vehicle charger company Pod Point.

Deliveroo’s dismal float shouldn’t be viewed as a yardstick by which future tech IPOs will be measured,” said Danni Hewson, financial analyst at stockbroker AJ Bell. “Nor should its experience deter other tech companies from choosing to list in London.”

Contributor

Julia Kollewe

The GuardianTramp

Related Content

Article image
After gloom over Nasdaq losses, tech investors hope for a ray of sunshine
Results from Microsoft Google, Amazon and more will show whether this month’s jitters are still affecting the web giants

Shane Hickey

21, Oct, 2018 @8:00 AM

Article image
Yes, the tech giants are big – in truth, probably too big to break up
Despite Congress’s threats, no politician or president will want to panic fragile stock markets with antitrust action

02, Aug, 2020 @6:00 AM

Article image
The trillion-dollar question: can the tech giants keep growing?
A startling stock-market landmark for Apple has been offset by big falls for Facebook and Twitter. Is this tumultuous period just a blip, or the first sign of trouble?

Nick Fletcher, Rob Davies and Alex Hern

04, Aug, 2018 @3:00 PM

Article image
Do high valuations for Uber, Snapchat and BuzzFeed herald a new tech bubble?
Charles Arthur: While some worry that overvaluation of online businesses is a warning sign, others say that this time things will be different

Charles Arthur

16, Aug, 2014 @11:05 PM

Article image
Good results offer the tech giants a chance to change the subject
After a torrid period for Silicon Valley’s reputation, strong financial news may help improve investors’ mood

Rob Davies

22, Jul, 2018 @6:00 AM

Article image
Shopping, songs, TV, transport … new tech has many sectors in disarray
While Ocado is trying to turn the grocery sector on its head, other industries also find themselves the target of disruptors

Angela Monaghan

09, Feb, 2019 @4:00 PM

Article image
Apple’s FBI battle is just the beginning of a reality check for the tech sector
Tim Cook’s in trouble with the Feds. Uber and Airbnb have made enemies, and the taxman is cracking down on tech firms the world over. The real world is catching up with Silicon Valley

21, Feb, 2016 @7:00 AM

Article image
War, virus, recession … nothing can stop the tech giants from growing
Tesla, recent recruit to the $100bn club, must be hoping it will become as unassailable as the likes of Amazon and Apple

Jasper Jolly

26, Jan, 2020 @12:05 AM

Article image
Pinterest, Snapchat, BuzzFeed – here come tech’s multibillion-dollar babies
In the dotcom boom, $1bn was a number to conjure with. Now many startups are valued at 10 times that, long before achieving flotation – or even profit

Charles Arthur

21, Mar, 2015 @4:00 PM

Article image
Even Amazon and the tech giants could fail to click in a changing market
If the online retail giant has felt some pressure on profits, what price other, less secure, Silicon Valley firms?

Rob Davies and Jasper Jolly

21, Apr, 2019 @6:00 AM