IPO History Offers a Humbling Reminder

When investors talk about upcoming IPOs, there is often an assumption that getting in early is an advantage.

History tells a more nuanced story.

Some IPOs have created extraordinary long-term value. Others became cautionary tales.

Google's IPO: A Reminder That Great Businesses Can Compound for Decades

When Google went public in August 2004, the IPO was priced at $85 per share through an unconventional Dutch auction process. Many market observers questioned the valuation and the offering structure at the time. (Yahoo Finance)

Yet over the following two decades, the business continued expanding across search, advertising, cloud computing, mobile operating systems, YouTube, and artificial intelligence.

According to long-term market data, a $1,000 investment made at Google's IPO would have grown to more than $150,000 by 2026, excluding dividends. (Macrotrends)

The lesson was not that every IPO succeeds, but rather that exceptional businesses can continue creating value long after their public debut.

Facebook's IPO: Sometimes the Market Gets It Wrong...At First

Facebook's 2012 IPO was widely considered disappointing.

The company priced shares at $38, but within months the stock had fallen more than 50%, reaching lows below $18 as investors questioned its ability to monetize mobile users. (Wikipedia)

Many investors gave up, but those who maintained a long-term perspective saw a very different outcome.

A $100 investment at Facebook's IPO would have been worth more than $1,800 by mid-2025, representing a return exceeding 1,700%. (Yahoo Finance)

The company did not change overnight, but rather Investors perception did.

Amazon: One of the Greatest IPO Success Stories Ever

Amazon's IPO in 1997 raised just $54 million and valued the company at roughly $438 million.

At the time, it was largely viewed as an online bookstore.

Today, Amazon spans e-commerce, cloud infrastructure, logistics, artificial intelligence, digital advertising, healthcare, and entertainment.

Investors often forget that Amazon shares declined more than 90% during the dot-com collapse before ultimately becoming one of the most successful public companies in market history.

Patience mattered more than timing.

WorldCom: When Growth Stories Become Warning Stories

Not every IPO or high-growth company becomes a success story.

WorldCom was once one of the largest telecommunications companies in the world and a market darling of the late 1990s.

In 2002, the company disclosed what became one of the largest accounting frauds in U.S. corporate history. Billions of dollars of expenses had been improperly recorded, ultimately leading to bankruptcy and significant investor losses.

WorldCom remains an important reminder that investors should evaluate not only growth potential but also corporate governance, transparency, and financial reporting quality.

The New Generation: Stripe, Databricks, Anthropic and Beyond

Today's anticipated IPO candidates share some similarities with previous generations of technology leaders.

Several operate in large addressable markets, and some have built products that businesses depend upon daily.

Several are at the center of artificial intelligence infrastructure and software development.

But investors should remember that before Google became Google and before Facebook became Meta, both experienced skepticism, volatility, and uncertainty.

The future leaders of the next decade may emerge from this upcoming IPO cycle.

Or they may not.

That uncertainty is precisely why diversification remains so important.

A particularly strong closing line for affluent investors would be:

"The goal is not to own every exciting IPO. The goal is to build a portfolio resilient enough that if one becomes the next Google, it can contribute meaningfully to your future, and if another becomes the next WorldCom, it doesn't derail it."

That framing reinforces diversification, fiduciary planning, and prudent portfolio construction while avoiding any implication that future IPOs will perform like historical winners.

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Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.

All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Stock investing includes risks, including fluctuating prices and loss of principal.​

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Winnie Sun is a registered representative with and securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Sun Group Wealth Partners, a Registered Investment Advisor and separate entity from LPL Financial.