The number of companies going public in 2017 surged 52% over the year ago period, hitting 160 deals, with the proceeds from the IPOs reaching $35.6 billion, double the amount in 2016, according to an analysis by Renaissance Capital.
Although as a whole the IPO market performed well with the IPO Index jumping 34% for the year, its best showing since 2013, the biggest public offerings largely fell flat on their faces. Of the five largest IPOs last year, four of them ended 2017 lower than their debut price. Here are those big deals that turned into losers -- and the one that soared above the rest.
5. Qudian (down 47.8%)
On its first day of trading in October, Chinese online payday lender Qudian (NYSE:QD) surged 40% above its $24 per share offer price, peaking at $35.45 a share before succumbing to new restrictions the government imposed that limits its ability to extend new loans. Qudian, which makes loans to youthful Chinese workers for amounts as little as $100, today trades at a little more than $13 a stub. It's now facing a slew of class action lawsuits from investors who bought early and lost big.
4. Altice USA (down 29.2%)
One of only a handful of IPOs in 2017 to raise more than $1 billion, Netherlands-based cable operator Altice USA (NYSE:ATUS) is the fourth largest cable company in the U.S. behind Comcast, Charter Communications, and Cox Communications, and was valued at $20 billion when it priced its offering at $30 a share. But the stock quickly began falling after investors began worrying that it would not be able to maintain its market share in France and would have difficulty growing in the U.S. A growing debt burden, disappointing third quarter performance, and the ouster of the president of the parent company soured investors on the stock and drove Altice USA's down to $18 a share. Although it jumped 20% from those lows, many early investors are still in the red with the cable operator.
3. Snap (down 14.1%)
After being one of the most highly anticipated IPOs of 2017, Snap (NYSE:SNAP) quickly fell out of favor as it became apparent that its user base wasn't growing nearly as fast as the competition and some of its best ideas were being co-opted by them. Facebook's Instagram platform, for example, has added Stories to its platform that has allowed its user base to surge well ahead of Snap. The vanishing message app was the biggest IPO last year, raising more than $3.4 billion in March when it priced its offering at $17 a share, today the company, which bills itself as a camera company instead of a social media app, stands at roughly $14 a share.
2. Sea (down 11.1%)
Singapore-based online gaming and e-commerce company Sea (NYSE:SE) stumbled almost immediately out of the gate when its stock, which was priced at $15 a share, fell below that value within the first hour of trading. Perhaps investors suddenly got spooked that the e-gaming specialist has never posted a profit and in its first quarterly report as a public company still failed to post one. Despite the fact that it is backed by Tencent, which recently bought a 10% stake in Snap, Sea hasn't been able to rise above the doubts, nor has its stock been able to rise above its offering price: it still trades around $13.50 a share.
1. Invitation Homes (up 17.9%)
And the winner of the best performing big IPO of 2017 is Invitation Homes (NYSE:INVH), the largest home rental agency in the U.S. The company raised $1.54 billion in its offering in February, the third largest of the year, pricing its shares at $20 each. The company is structured as a real estate investment trust and was born out of Blackstone Group (NYSE:BX) buying up foreclosed properties after the financial markets crash. It spent $10 billion cobbling together a portfolio of 48,000 homes located mostly in the western and southeastern U.S.
While it traded relatively flat after going public, Invitation Homes surged in August after announcing it would be merging with StarWood Waypoint Homes to create an $11 billion home rental service. With the deal completed in November, Invitation's shares today trade above $23 a piece.
Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Facebook and Tencent Holdings. The Motley Fool recommends Comcast. The Motley Fool has a disclosure policy.