Not counting the brief government shutdown at the beginning of the year, 2019 is arguably the busiest year of IPOs in the history of the New York Stock Exchange (NYSE) and Nasdaq. A record number of Silicon Valley unicorns, led by Uber and Lyft, became public companies this year at sky-high valuation.
However, many of them have disappointed investors so far, with stock currently trading at well below their IPO prices or down significantly from mid-year peak levels.
As 2019 draws to a close, we’ve rounded up seven most notable IPO flops this year. While some of these cases are merely a fair readjustment of a company’s inflated pre-IPO valuation, others actually imply great buying opportunities as we move into the new year.
IPO Date: March 29, 2019
Market Value Gained Since IPO: -34%
U.S. ride-sharing leader Lyft was the first Silicon Valley unicorn to go public this year, debuting shares at $72 apiece on the Nasdaq in March, which valued the company at $24 billion.
To investors’ disappointment, Lyft’s share price dropped quickly in the initial trading weeks and hasn’t really recovered much since then. While optimists bet on Lyft’s do-good brand proposition, skeptics are unsure about whether the company will survive increasing competition and eventually turn a profit.
Shares are currently trading at $47, more than 30% below the IPO price.
IPO Date: May 10, 2019
Market Value Gained Since IPO: -34%
In May, Lyft’s larger rival Uber debuted its long-awaited IPO, which valued the ride-hailing company at a whopping $80 billion. Like Lyft, Uber (UBER) has yet to prove to investors that it’s worth the sky-high valuation. After two money-losing quarters, Uber shares tumbled to below $30 for the first time in November and are currently trading at only two-thirds of the IPO price.
Still, there’s a lot brewing in the shop for Uber in 2020, including doubling down on scooters and bikes in Europe and possibly unloading Uber Eats in India. CEO Dara Khosrowshahi has also promised that profitability is just around the corner given the company’s current pace of revenue growth.
IPO Date: June 20, 2019
Market Value Gained Since IPO: -46%
Another hotly anticipated unicorn IPO, workspace messaging app Slack’s stock market debut in April was so intense it caused quite a bit of confusion on the first trading day thanks to its unusual ticker symbol.
The stock has been struggling in 2019 so far, mainly because its rival, Microsoft’s Teams, continues gaining traction in the cloud-based productivity management space. Shares are currently trading at nearly half of their IPO price.
IPO Date: April 18, 2019
Market Value Gained Since IPO: -4%
Online scrapbook Pinterest enjoyed a few weeks of bull run in July and August thanks to a better-than-expected second quarter. But the trend reversed quickly in the following months and took a deep dive in late October after the company posted mixed third-quarter results.
Some analysts believe that the recent sell-off was an overreaction to Pinterest’s third-quarter earnings and that the stock is set for a rebound soon.
IPO Date: June 14, 2019
Market Value Gained Since IPO: +30%
In June, a pack of dogs rang the opening bell for the IPO of pet supply e-tailer Chewy, a subsidiary of PetSmart. Chewy opened trading stock at $22 per share at a total valuation of $8.8 billion.
Cumulatively, the stock has performed well so far, up by 30% from the IPO price. But that was after a few rounds of sell-off in recent months from its peak in the summer.
Wall Street is mostly bullish about Chewy’s prospect in 2020, betting on the company’s steady quarter-to-quarter growth and a promising subscription model.
IPO Date: October 28, 2019
Market Value Gained Since IPO: -24%
British billionaire Richard Branson’s Virgin Galactic (SPCE) was the first space tourism company to ever go public. Perhaps due to the fact that the company (as well as its competitors) has yet to establish a viable business, the market wasn’t particularly warm to Virgin Galactic’s big landing, causing its shares to tumble almost by half in the weeks following the IPO.
But next year could be a major turnaround for Virgin Galactic, as the company plans to send its first paying customer into space and Morgan Stanley recently awarded it a bullish rating to its stock.
IPO Date: May 2, 2019
Market Value Gained Since IPO: +204%
Until three months ago, Beyond Meat was the biggest winner of this year’s stock market. Shares of the plant-based meat producer jumped 10 times in just two months after the IPO. But starting late July, Beyond Meat (BYND) shares have been on a staggered crash, as both initial excitement wore off and new competitors entered the trendy business of fake meat.