Comes now the triumphant case of Austin, Texas based BigCommerce who IPOed at $24/share on Tuesday. It was cause for local pride and a bit of celebration.
But, was it really?
Absorb these facts:
1. Company comes public at $24/share and nets $216,000,000.
Well played. Bravo! Years of hard work come together. The American Dream is alive in Austin By God Texas.
2. Stock price closed that day at $72.27/share, a nifty 201% above the IPO price in less than one full day of trading. [Helen, I think we go with the big Lexus.]
3. On Wednesday, stock opens at $68, rewarding the folks who got a slice of the IPO and the investment bankers who bought the 15% over-allotment, the Green Shoe, for which they paid $24/share.
4. Stock closed at $91.80/share on that same Thursday. At this price, the company’s market cap is in the $7B range. A lot of value was created for the founders and the venture capitalists who threw in over $200MM to build this baby.
I love the smell of capitalism in the morning.
For those doing the math, confirm that the $24/share to $91.80/share run is a 283% gain. Not a bad performance for two days.