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How 10 tech IPOs from 2004 to 2023 closed on their first day

Tech IPO first-day performance varied widely across these 10 well-known listings, from Airbnb and Snowflake more than doubling to Uber closing below its offer price

An IPO price and a first-day closing price measure two different things. The company and its underwriting banks set the first number before any public trade takes place. The second number is what buyers and sellers on an open exchange agreed the shares were worth after a full session of trading. The distance between the two is the figure this guide tracks.

That gap tells investors something, but not everything. A large first-day jump signals that public demand ran well ahead of the price the company accepted. In finance, that gap is known as money left on the table. A flat or negative close can point to a deal priced at the top of what the market would pay. Neither outcome predicts where a stock trades a year or a decade later. Some of the companies below later changed names, changed owners or left the public market entirely.

This guide to tech IPO first-day performance looks at 10 well-known listings from 2004 to 2023. They are a selection, not a ranking, and they appear in chronological order. The group spans search, social media, e-commerce, ride-hailing, cloud software, home rentals, electric vehicles and chip design. Some listed on Nasdaq $NDAQ -0.72% and others on the New York Stock Exchange. One of them, Alibaba, is a Chinese e-commerce company that listed in New York.

Each slide uses the same method. Day-one change runs from the IPO price to the closing price at the end of the first trading session. All prices are in U.S. dollars. Opening prices appear only where they help explain how a first day unfolded.

The results cover a wide range. Uber $UBER -0.15% closed about 7.6% below its offer price in May 2019, the only decline in this set. Facebook $META -0.96% finished its 2012 debut almost exactly at its offer price, up about 0.6%. At the other end, Airbnb $ABNB -2.13% and Snowflake $SNOW 0.16% both more than doubled on their first days in 2020. Airbnb rose about 113%, and Snowflake rose about 112%. The rest landed between those points, from Google $GOOGL -1.24%'s gain of about 18% in 2004 to Twitter $TWTR 0.00%'s jump of about 73% in 2013.

Google's 2004 Nasdaq IPO and its auction-style pricing

Google $GOOGL -1.24% went public on Nasdaq $NDAQ -0.72% on Aug. 19, 2004, at $85 a share. It closed its first day of trading at $100.34, a gain of about 18%. The company sold its stock through an auction-style process rather than the standard bank-led approach.

That pricing method set the listing apart. In a conventional IPO, investment banks gauge demand from large institutional clients. The banks then recommend a price and decide which buyers receive shares. This process is known as bookbuilding.

Google used a version of what is called a Dutch auction. Bidders submitted the number of shares they wanted and the price they were willing to pay. The offering price then came from those bids rather than from a negotiation between the company and its underwriters.

The approach was unusual for a technology listing of Google's size. It opened the bidding to a broader pool of investors, including individuals. Under bookbuilding, share allocation stays mostly in the hands of the banks running the deal.

The first-day close worked out to $15.34 per share above the offer price. That jump is often called an IPO pop. An auction is designed to shrink the pop by letting bids, not bankers, find the price. Google's shares still rose once public trading began.

Larry Page and Sergey Brin founded Google in 1998. The two met as graduate students at Stanford University, where their search engine began as a research project. The company name is a play on googol, the term for the number one followed by 100 zeros. Its shares traded under the ticker GOOG after the debut.

In 2015, Google reorganized under a new parent company called Alphabet. Google became a subsidiary, and Alphabet became the publicly traded holding company. Page moved to lead Alphabet, and Sundar Pichai took over as Google's chief executive. Shareholders from the 2004 offering ended up holding stock in a parent company formed 11 years after the IPO.

Facebook IPO day one closed just above its $38 offer price

Facebook $META -0.96%'s Nasdaq $NDAQ -0.72% debut on May 18, 2012, ended almost exactly where it began. The social network priced its shares at $38. They closed the first day of trading at $38.23, a gain of about 0.6%.

The flat close masked a volatile session. Facebook stock opened at $42.05, or $4.05 above the offer price. By the closing bell, nearly all of that early premium had disappeared. The shares finished 23 cents above the price the company and its underwriters set before trading began.

Technical problems at Nasdaq complicated the day. The exchange's systems struggled with the volume of orders at the opening, and the start of trading in the stock was delayed. Some investors were left unsure whether their orders had gone through. The glitches became one of the most discussed parts of the listing.

In a U.S. IPO, the lead underwriter can buy shares in the open market to keep a new stock from sliding below its offer price. The practice is known as price stabilization. For Facebook, that role fell to Morgan Stanley $MS 2.30%, which led the group of banks that underwrote the deal.

Mark........

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