There are always a lot of advantages that come with being first in anything. When it comes to IPOs, this statement couldn’t be more relevant. If you are one of the earliest investors in a company, you will be able to get two things:
First, you will get value stocks. This means that you are paying relatively less for a stake that has huge growth potential. In addition to this, if the company you have invested in explodes and becomes a big name, your returns will be huge.
But it’s not just enough to say this with words. In order to give you a better understanding, we ran a small experiment. We tried to figure out how much money you’d make if you had invested $100 in certain companies a few years back. We went back to the time these companies first went public and analyzed the stock price since then and found out how much a $100 stake, bought during the IPO, would be worth today.
Well, it turns out that it actually pays to be first.
Here’s a full breakdown:
- Nike - Nike is one of the leading sportswear brands in the US. The company first went public in 1980. At the time, one share was going for less than $0.18. If you invested $100 during the IPO, your stake today would be worth $6.4 million. Nike’s current stock price stands at slightly over $85.
- Walmart - Walmart is also another company that would have delivered great returns. However, the retail giant went public earlier than many large US corporations. The first IPO was floated in 1969. One share was going for $0.008. An investment of $100 would have gotten you slightly above 12,000 shares at the time. That stake would be worth $1.24 million today.
- Coca-Cola - Coca-Cola is the biggest beverage maker on the planet. The company had an early start in its IPO. The first initial public offering was floated in 1919. The stock price at the time was around $0.004. A $100 investment would have made you a millionaire today. That stake would be worth $1.04 million in today’s market.
Other companies that featured in the top five list include Walt Disney, which would have given you a stake worth $753,000 from an investment of only $100 in the IPO. The top five list is wrapped up by McDonald’s. The first food chain went public in 1965. An initial investment of $100 during the IPO would be worth $569,800 today.
However, these are not the most valuable companies in the planet. Some of the tech giants that are now worth hundreds of billions don’t offer the same returns. Microsoft for example which went public in 1986 would have delivered little under $150,000 in returns today for an initial investment of $100 in the IPO.
In addition to this, a $100 investment during Amazon’s IPO in 1997 would have earned you $120,000 in the current market. Apple, on the other hand, would have made you $43,000. The smartphone maker went public in 1985.