IPO investors are not afraid of the ghost.
The year's first tech IPO, Snap (SNAP) raised $3.4 billion, more than twice as much as every 2016 VC-backed tech IPO combined. It popped 44% after pricing above the range, giving the near-absent tech sector a strong start to 2017. Snap's gain is in line with the 2016 tech IPO class, which now averages a return of 43%.
Snap's first-day gain is by far the best of 2017 - not surprising when the most active sectors are industrials, financials and energy. However, investors should note that high-flyers can have poor aftermarket trading. The last billion-dollar tech IPO to surge over 40% was Twitter (TWTR), which popped 73% but now trades 39% below its offer price. Regardless of where Snap goes from here, IPO investors showed their appetite for growth, even when paired with heavy losses, and two more tech unicorns are already preparing to launch IPOs: API company MuleSoft (MULE) and analytics provider Alteryx (AYX) should be next.
Below, we provide a look at how the largest tech IPOs of the past five years performed on their first day, and one year after the IPO.
| Ten largest tech IPOs since 2012 | |||||
| Issuer |
Offer Date |
Deal Size ($mm) |
First day return |
First year return |
|
| Alibaba (BABA) |
09/18/14 | $21,767 |
+38% | -3% | |
| Facebook (FB) | 05/17/12 | $16,007 |
+1% | -30% | |
| Snap (SNAP) | 03/01/17 | $3,400 |
+44% | ? | |
| First Data (FDC) | 10/14/15 | $2,560 |
-2% | -17% | |
| Twitter (TWTR) | 11/06/13 | $1,820 |
+73% | +57% | |
| JD.com (JD) | 05/21/14 | $1,780 |
+10% | +78% | |
| IMS Health (IMS) | 04/03/14 | $1,300 |
+15% | +35% | |
| Mobileye (MBLY) | 07/31/14 | $890 |
+48% | +140% | |
| LINE (LN) | 07/11/16 | $722 |
+27% | ? | |
| Workday (WDAY) | 10/11/12 | $637 |
+74% | +192% | |
