by Kevin Griffin writing for cybercruises.com
Two Initial Public Offering (IPO) floats on the Nasdaq in the past seven months, each valued at about $28 at the close of markets on Friday, had totally different outcomes.
Two Initial Public Offering (IPO) floats on the Nasdaq in the past seven months, each valued at about $28 at the close of markets on Friday, had totally different outcomes. Credited to Yahoo Finance
First came Facebook (FB), which floated on May 18, 2012 at $38 a share. In a disorganized sale process the share price fell, and kept falling until September, when it crashed below the $20 barrier, a value that was half of what it floated for. Many lost money as the Facebook flotation was given the sobriquet “worst IPO in a decade,” but the share price of the $16 billion IPO has since risen to $28.55 on Friday, still a 25% discount on the original price.
The other flotation was Norwegian Cruise Line (NCLH), whose IPO launched on January 17, when it opened at $19 a share, above the initially intended range of $16-18, raising $446.5 million for the cruise line. Twenty-five days later, it had risen to $27.91 on Friday’s close, a premium of 47% on the original price. Many commentators were surprised at how well this share had done, particularly given Norwegian’s levels of debt.
Which shares would you buy and why?.It might be interesting to keep an eye on these two for the next year or so.