Golden IPOs that Turned into Cash Cows for Investors
In business, it is quite difficult to turn have an investment of $10,000 give you a return of $1 million. The bright idea you have been looking for might never come, and if it does, you might not have the funding to capitalize on it. However, opportunities to raise such large amounts of capital sometimes arise in the IPO market. In these situations, investors buy shares in a company in early years. Sometimes it may take decades to see such incredible returns. However, investors across the board agree it is worth the wait. Below are some of the offerings over the years that have given investors a hundred-fold returns.
- Amazon Inc.
In 1994, Amazon founder Jeff Bezos came up with the business idea to set up an eCommerce site for books. By 1996, the company had generated sales of up to $15.7 million and incurred losses that totaled to $5.8 million. Come May 1997, however, and Amazon Inc. gathered a revenue totaling to $54 million during its release. On its first day on trading floors, Bezo’s company was under the ticker AMZN. The stock popped 30 percent that day. The company faced severe competition from other online bookstores including Barnes & Noble. However, it went past these issues to become one of the top sites for e-commerce and consequently a threat to brick-and-mortar retailers. As the company continued to grow, it launched the Kindle reader in 2007. By 2010, Amazon Inc. was returning investors’ money by a hundred fold. With time, the Kindle reader has continued to grow and now has the Kindle Fire Tablet in the markets. From this growth, an investor would be able to obtain a return of $1.3 million on a $10000 investment.
As early as fifteen years old, Michael Dell was already building computers. Growing up, he dropped out of the University of Texas to launch the company Dell Inc. As personal computers saw increasing popularity, the company capitalized on the opportunity and went public in 1988. By 1998, the company was already raking in returns a hundred times over investments. Notably, the principal factor to Dell’s success was not just the computer revolution. It was a change in the business’ model. Dell adopted a manufacturing model where they built machines upon the request of consumers. As such, cash flows rose and consequently profits increased up to the current returns that would lead to an investor who had put in $10000 at the company’s release now receiving $1.5 million.
In April 1976, the founders of Apple started the company around their hand-built devices. Steve Jobs, Ronald Wayne, and Steve Wozniak began the business, and by December 1980 the company was valued at $1.79 billion. Jobs and Wozniak went ahead to incorporate the firm in January 1997. Despite Apple being one of the leaders of the tech revolution, they had their share of pitfalls. It took over 30 years for investors to see increases that led to 100x returns on their capital. The returns were finally pegged at more than a hundred-fold in 2011, and this coupled with products such as the iPhone in recent years have led to the company having investors who put in $10000 having a return of $1.7 million.
In this evaluation, it is quite clear that there is a theme to these companies. They focused on a primary market and with time, fostered growth into other sectors. Their increases in revenue increased by over 100 percent year by year. This was as a result of continued innovation as well as joining new markets. It is these characteristics that spurred the growth of these companies to 100 times over.