The Billion-Dollar IPO Club is an exclusive one. Out of the over 3,000 IPOs that have made it to market in the last 20 years, only 119 (4%) have raised $1 billion or more. 30 billion-dollar IPOs have come to market in the last five years, a group increasingly comprised of high-growth, large-loss tech companies.
The most recent addition to the Club, consumer products giant Reynolds Consumer Products (REYN) raised $1.2 billion last week and quietly gained 10% on its first day of trading. Contract research organization PPD (PPD) is close on its heels, expected to raise $1.5 billion this week.
Since 2015, here's how billion-dollar IPOs have performed compared to the average IPO.
- They've posted similar average first-day gains. Billion-dollar IPOs have averaged a first day return of 12%, slightly below the overall average of 15%. However, the billion-dollar group has a higher median first day (9% vs. 6%) thanks to a much smaller spread.
- Post-IPO returns have been more modest... On average, billion-dollar IPOs have lagged behind IPOs as a whole in the aftermarket, posting smaller aftermarket (10% vs. 31%) and total returns (22% vs. 53%).
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