It’s graduation day for the class of 2010, and you know what that means - presents!
Your relatives have gone all-out to reward you for years of hard work in school, but
there’s one gift that intrigues you.
It’s from your rich uncle - you know, the one who shows up to every event wearing an
Armani suit, even summer picnics.
He’s giving you a thousand dollars, but there’s only one catch - he wants you to
invest it.
He says investing is a great life lesson.
Sometimes you win, sometimes you lose, and the right investment can change a life.
He got his start making savvy investments decades ago, and he wants to give you the
same chance.
Now there’s just one problem - picking the right stock.
You know one of the best opportunities to make a lot of money on a stock is to find
low-priced IPOs - initial public offerings.
These are stocks where the company has just gone public and is about to skyrocket in value
as people buy shares.
Getting in on the ground floor is a great opportunity.
Now you just have to decide what to invest in.
Two caught your eye.
Tesla, the electric car startup owned by Elon Musk, and Zoinkos, the ferret-rental company
from Liechtenstein.
Maybe you’ll flip a coin.
After all, how much difference could one investment make?
It turns out, a lot.
Many of the most powerful companies in the world started out very affordable, and the
people who got in on the ground floor by buying shares wound up making a lot of money.
It helped that many of the companies split their stocks multiple times, dividing the
share price and multiplying the number of shares people own, so the shares were easier
to buy.
So how much would you make if you had invested in these companies on IPO day?
And just how did they get so big?
Tesla made headlines in January 2021 as its eccentric founder Elon Musk became the richest
man in the world.
This doesn’t mean he has a giant pool of money in his mansion like a certain duck - most
of the wealth of billionaires is actually due to stock holdings, and that’s how Musk
keeps trading that top spot with Jeff Bezos and Bill Gates.
Musk is often in the headlines for less-profitable ventures, like writing songs about Harambe
the Gorilla and getting in trouble with government bodies for jokes about stock value, but his
product line is only growing.
As concerns about the environment grow, his selection of electric cars, energy batteries,
and solar panels are being bought not just by private citizens, but by governments.
He’s sold over a million of his signature electric cars worldwide.
His start, though, was much more humble.
When Tesla went public at the New York Stock Exchange on June 29th, 2010, you could get
a share for only $17.
That’s less than the price of a Fajita plate from Applebee’s, and you could have a share
of one of the world’s biggest companies.
Today, at the start of 2021, Tesla stock stands at around $714, which means the money that
bought you over fifty shares of Tesla in 2010 would buy you just over one share now.
And if you had invested all that money in Tesla back then and just sat back and let
it grow, after a 5-1 stock split you would now have over $188,000.
That’s a pretty good graduation present - and could probably buy you a few Teslas.
But what about Musk’s top rival for the top spot?
How’s he doing?
Remember walking your local mall and seeing one bookstore after another?
Well, there are a lot fewer of them now and that’s because everyone is getting their
books from one company - Amazon.
But the omnipresent online retailer founded by Jeff Bezos isn’t just a bookstore anymore.
It’s become one of the biggest shopping companies in the world, delivering everything
from holiday season presents to used collectibles.
They became a dominant force in the grocery market when they acquired Instacart, run their
own streaming service with hit dramas like The Marvelous Ms. Maisel, and are one of the
most powerful web hosting companies in the world - meaning that even if they don’t
own a site, many places around the internet are paying them to operate.
So when they went public, it was a big deal.
It was May 15th, 1997, and Amazon was still mostly an online bookseller in an online market
that was just starting out.
So their IPO wasn’t the hottest ticket in town - only $18 a share.
But things have changed a lot since then, and for the lucky few who invested right at
the start, they’ve seen a small fortune grow.
The current Amazon stock price as of February 2021 is over 3,100 a share and has been split
three times, so if you invested in the company on day one, you would have a nest egg of over
$1,300,000 - which would buy a LOT of items on Amazon.
What about the third guy in the world’s richest man sweepstakes?
No one’s been atop the tech world longer than Bill Gates.
He became synonymous with home computers in the late 1980s and 1990s, and he hasn’t
been knocked out of the top spot in his sector yet.
The company took a huge jump in momentum when they entered the video game world 2001 with
the Xbox, becoming the third big player in the gaming market alongside Nintendo and Sony.
Sure, there was that pesky thing with the company being hit by an antitrust lawsuit
from the federal government in the 1990s, and the company’s rivals have been picking
up steam, but Microsoft is still going strong.
So when would you have had to get on board with the company on IPO day?
One of the earliest modern tech companies to go public, investors have been able to
have their piece of Microsoft since March 13th, 1986.
The company was a hot investment from the start, and its initial share price of $21
reflected that - especially without the inflation that has happened in the last 34 years.
There have been a lot of fluctuations over the years, but right now Microsoft is in a
bit of a lull.
As of 2021, its shares are around $234 a share - but the stock has been split nine times,
meaning you would have over $2,600,000 if you invested that $1000 in it and kept it
there.
That’s a lot of video games - and proof that playing the long game can pay off big
time.
What about Microsoft’s top rival?
It’s hard to believe there was ever a time when Apple wasn’t the hottest thing around,
but the tech company started by Steve Jobs spent much of its early years as a distant
second to Microsoft.
Its computers were more expensive and seen as a niche product for tech-lovers.
That changed with the onset of the mobile era, as one product after another from Apple
became the hottest thing to have.
First it was the iPod, the portable music player.
Then the iPhone, the smartphone that was basically a mini-computer, followed by the tablet computer
iPad.
Apple still makes desktop computers, but they’re only a small part of their brand now.
With a newly launched streaming service, they’re as much a lifestyle brand as a computer company
now - as their die-hard fans will be happy to tell you.
And for those who have been on board from the start, they’ll reap the rewards.
It was December 12th, 1980 when Apple went public for savvy investors.
The price was $22 a share, not much different from Microsoft six years later.
And while the company has had many peaks and valleys over the years, its price right now
doesn’t compare to some of the newer tech heavyweights.
A share can be had for just under $126 as of February 2021, but the five stock splits
mean you’ll have many more shares and an investment portfolio worth just over 980,000
- more than enough to afford whatever flashy new gadget they have coming next.
None of these companies, however, have quite the global reach of the next one.
In the dawn of the internet, the center of the World Wide Web wasn’t social media networks.
It was search engines, where the early adopters could scour the internet for sites that interested
them.
And few rose higher and faster than Google.
Founded by college students Larry Page and Sergey Brin in 1998, the company soon gained
a reputation as the smoothest and most accurate search engine around - despite those Bing
ads.
But they’ve become so much more than that since, hosting the world’s most popular
free email and document sharing services, GMail and Google Docs.
They provide video chat services, maps, and their own browser in Google Chrome.
They even own the world’s most popular video site, YouTube.
That cat video you just watched?
Brought to you by Google.
And they’ve come a long way since IPO day.
Google was already a powerhouse when they went public on August 14th, 2004, with their
IPO going for $85 a share.
So you would have only been able to get just over 12 shares with your $1000 - if you were
able to get one.
Demand was so high, there was an online auction by investors.
So were they rewarded in the long term?
Well, the share price as of February 2021 is over $2000, one of the top tech stocks
behind Amazon.
If you went in on the big ticket stock then, you would have over $41,000 in the bank right
now thanks to a single 2-1 stock split.
And it doesn’t look like Google is slowing down any time soon.
But in the internet world, success can be fleeting.
Google wasn’t the first search engine to become a household name.
That was Yahoo!, the front page of millions of internet users during the 1990s and early
2000s.
Their catchy marketing campaign and easy to navigate design made them popular, and they
were also one of the first search engines to bundle a homepage with a free email service.
Yahoo Mail was one of the most popular email services for a long time, but multiple hacking
incidents led people to start switching to providers they saw as more reliable.
And of course, there was Google, which eventually left their rival in the dust.
But when Yahoo went public, they were one of the hottest tickets in town.
It was April 5th, 1995, and Yahoo went public at $13 a share.
It was quickly snapped up, and at its high Yahoo was up to $500 for a single share.
For those who invested, it was a windfall - but it would evaporate quickly.
The price declined, and never recovered.
By the time it ended its run as a publicly traded company in 2017, most of its value
had evaporated, and those who invested heavily in it took a bath.
The age of the mega-search engine was ending.
The age of social media had begun.
When Mark Zuckerberg co-founded Facebook as a Harvard student, it was little more than
a dating tool for him and his friends.
But as the social media network grew, it became a key part of the modern age of the internet.
It made it easy to keep up with people who you hadn’t seen in years, to get into political
arguments with friends of friends, and to see every single cat meme your mother came
across on the internet.
So when it finally went public, anticipation was high.
It was May 18th, 2012 and shares went public at $38.
But for the many shareholders who jumped on board, it would be a bumpy ride.
The site faced intense competition from other sites like Twitter and Tumblr, and controversies
around the site’s use of its user data and its involvement in election-era disinformation
led to Zuckerberg being ordered to testify in front of Congress.
But the site acquired popular image-sharing site Instagram, which helped to shoot the
stock back up.
Currently the stock sits at around $250 a share with no stock splits, which means your
$1000 share would be worth a decent $6100 right now - but many people wonder if it’s
downhill from here.
What about Facebook’s top rival?
Twitter had a much more straightforward mission than Facebook - a blogging site where anyone
could share any thought they had, as long as it was 140 characters or less.
Co-founded by Jack Dorsey, the site became a hub for just about everyone - celebrities
recruited new fans, influencers used it as a way to promote their content, and random
people threw out their bad takes for the entire internet to yell at.
World leaders could even use the site to promote their policies and make announcements - until
Twitter drops the ban-hammer at least.
So how did it fare when the site went public?
November 7th, 2013 Twitter went public with a relatively modest share price of $26, and
it quickly became a hot stock.
The site’s stayed strong since, with controversial personalities bringing new traffic - and no
small amount of controversy - to Twitter.
There have been controversies over the site’s lack of moderation, but it’s become the
modern day equivalent of the public square.
So has that been rewarded in terms of share price?
Not really.
The site hasn’t made any big acquisitions, and its price currently sits at $70 a share
after one 2-1 split - meaning an opening-day investment of $1000 would be worth a little
over $1600 now.
Enough time on social media - what about the internet’s biggest entertainment hub?
Few companies have had a stranger journey than Netflix.
The company started as a mail-order DVD service in 1997, an alternative to the popular video
stores.
It had trouble competing with the established chains, and for a time was even considering
a sale to powerhouse Blockbuster.
Then Reed Hastings made one investment that changed everything - original content.
They debuted their first original drama in 2013, and from there greenlit hundreds of
popular water-cooler shows like Stranger Things, The Witcher, and Tiger King.
The company’s simple business model - keep many people subscribed for a modest per-month
fee that starts at $10 a month - has paid off.
Also, Carole Baskins totally fed her ex-husband to tigers.
But when Netflix went public, it was a different story.
At launch day on May 23rd, 2002, Netflix was still a small DVD company and their share
could be had for a modest $15 each.
That was ten years before the company’s sea change began, and many people undoubtedly
unloaded their shares.
But for those lucky few who didn’t?
They saw one of the biggest returns on their investment around, with shares currently going
for $533 each as of February.
That means those lucky few would have over $461,000 of Netflix stock right now - or over
10,000 years of a Netflix subscription.
So are there any big IPOs that are still good buys now?
For anyone who’s ever tried to get a taxicab on a busy night, you probably have a horror
story.
That’s what created the need for the latest big company to go public - Uber.
This rideshare app quickly took over the city streets in the 2010s, and founders Travis
Kalanick and Garrett Camp soon built it into a transportation powerhouse.
It quickly expanded into delivery services with Uber Eats, which streamlined millions
of restaurants under one delivery platform - something that paid off in a big way in
2020 when we were all ordering delivery.
Many cities started pushing back, trying to regulate Uber, but the company’s momentum
seemed undeterred when it went public.
So was Uber able to capitalize?
It was only May 10th, 2019 when Uber went public at $45 a share.
This was in the middle of controversy as several cities including New York tried to put caps
on its service - but the company was still going strong.
Amid the chaos of 2020, the company saw its delivery platform boom and its traditional
ride share system sag a bit.
The result?
Modest gains, as February 2021 saw Uber’s share at around $60.
So you’d have about $1390 off your original investment.
Is this still a stock worth keeping?
If you believe the company is going to rebound and keep going, the price is right to not
just keep, but to invest now.
The stock market has thousands of companies listed, and for many of them, getting in can
be the difference between a modest gain, a loss - or a fortune.
For more on the stock market, check out “What If The Stock Market Crashed Tomorrow”, or
watch this video instead.