Worst IPOs ever. Younger(ish) readers will recognize the clipped tone of Comic Book Guy, the overly opinionated proprietor of The Android's Dungeon & Baseball Card Shop from The Simpsons. With LPL Financial in the news this week with an IPO of its own, we decided to take a look back at some of the more colorful company implosions, post-public offering, with the help of Inc.magazine. Unfortunately, it isn’t much of an opinion to say they failed.
No. 1.—Inphonic: Inc. lists the Washington-based company in the top spot. It was poised to take over the online mobile phone and services industry when it went public in late 2004 following a three-year growth rate of more than 23,000%. Three years later, the company went belly up and was bought by a private equity firm hoping to salvage its potential.
No. 2.—Vonage: After this VoIP provider went public in May 2006, its shares dropped from $17 to less than $12, making it the worst public debut in more than two years. According to Inc., founder Jeffrey Citron has since been named in a lawsuit claiming the company exaggerated its financial health.
No.3.—WebVan: As the magazine notes, this was a poster child for the dot-com era. This pioneer online grocer launched in June 1999, raised $800 million in venture capital, and went public at $24 a share by November. Yet, within a year, prices dropped to $0.28 a share and the company filed for bankruptcy in July 2001. The problem? No customers.
No.4. —RefCo: In August 2005, this New York financial firm made a $4 billion stock market debut. Just weeks later, its value plunged amid revelations that an entity owned by Refco CEO Phillip Bennett owed the company $430 million. It went bankrupt before the end of the year.
No.5. —Pets.com: It took just nine months for this online pet accessories retailer to go from a stellar Nasdaq debut in February 2000 to liquidation, with trading prices dropping from over $11 per share to less than a quarter. Despite plenty of hype, the company had no revenue growth.
No.6.—Superior Offshore International: The magazine reports the stock for this underwater construction and commercial diving services firm for the offshore oil and gas industry rose 17% to close at $17.54 on its first day of trading on the Nasdaq in April 2007. But it's been all downhill since then, with Superior trading as low as $4.41, making it one of the biggest IPO flops of the year—even while energy consumption and prices continue to soar.
No. 7.—ZBB Energy: The biggest IPO loser of 2007, this manufacturer of energy storage systems opened at $6 a share in June. Just six months later, the former Australian Securities Exchange company's stock dipped below $2.