Initial public offerings provide companies with the wherewithal to pursue growth opportunities without having to bear the burden of repayment.

What Is an IPO

An IPO is a route adopted by private companies to go public by offering new shares to institutional as well as retail investors. Apart from opening the gateway for huge and relatively lower cost financing, an IPO confers indirect benefits as well. The increased transparency mandated for a public listing helps the company to raise debt at favorable terms.

On the other hand, the company may have to face pushback, such as compliance with stricter disclosure norms and yielding to pressure from market participants who clamor for short-term gains.

2010 – A Bumper IPO Year

The year 2010 was a bumper year for IPOs, as more than twice as many new issues were floated as compared to the previous year. The IPO boom of the year was spearheaded by special purpose acquisition company, or SPAC, deals.

What Determines Success of IPOs

Success of an IPO depends on several factors such as the company delivering on its promises and managing investor expectations with efficient forecasting, according to Ernst & Young. External factors such as competition, geopolitical conditions, macroeconomics, and market sentiment also have a big role to play in the post-IPO performance of stocks.

Benzinga tracked some of the high-profile IPOs of 2010 to check on their success, or a lack of thereof, a decade after their listing. Returns post-IPO were calculated by taking into account closing prices on the listing date and Oct. 5, 2021.

1. Tesla, Inc. (TSLA)

• Business: Manufacturer of EVs.
• IPO Date: June 29, 2010.
• No. of shares offered: 13.3 million.
• Offer price: $17.
• Gains/Loss: +16,230% (from the split-adjusted closing price of $4.78 on the debut session).

2. NXP Semiconductors N.V. (NXPI)

• Business: Semiconductor manufacturer, primarily supplying to automotive industry, and based out of the Netherlands.
• IPO Date: Aug. 6, 2020.
• No. of shares offered: 34 million.
• Offer price: $14.
• Gains/Loss: +1,324%.

3. Pacific Biosciences of California, Inc. (PACB)

• Business: Provider of high-quality sequencing platforms for the life sciences industry.
• IPO Date: Oct. 27, 2010.
• No. of shares offered: 12.5 million.
• Offer price: $16.
• Gains/Loss: +53%.

4. FLEETCOR Technologies, Inc. (FLT)

• Business: Payment provider for commercial fleets, major oil companies, and petroleum marketers.
• IPO Date: Dec. 15, 2010.
• No. of shares offered: 14.58 million.
• Offer price: $23.
• Gains/Loss: +858%.

5. Primerica, Inc. (PRI)

• Business: Financial service provider for families and a spin-off unit of Citigroup, Inc. (C).
• IPO Date: April 1, 2010.
• No. of shares offered: 21.36 million.
• Offer price: $15.
• Gains/Loss: +779%.

6. KKR & Co. Inc. (KKR)

• Business: Investment firm that offers alternative asset management and capital markets and insurance solutions.
• IPO Date: July 15, 2010.
• No. of shares offered: 204.9 million common units.
• Gains/Loss: +919%.

7. JinkoSolar Holding Co., Ltd. (JKS)

• Business: Solar panel manufacturer based out of China.
• IPO Date: May 14, 2010.
• No. of shares offered: 5.86 million ADSs ( American depositary shares).
• Offer price: $11.
• Gains/Loss: +308%.

Tesla Graduates with Flying Colors

The Class of 2010 managed to put up a decent show 10 years following their public debut. Specifically, Tesla, which has polarized both analysts and the investment community over its heady valuation. It's now standing head and shoulders above the others with a mouth-watering gain of over 16,000%.

$1,000 invested in the Tesla IPO would have fetched 59 shares at the IPO price of $17 apiece. The company has since split its shares once in Aug. 2020 in a 5:1 ratio. The split would have multiplied the 59 shares to 295 shares.

NXP, which was unsuccessfully pursued by Qualcomm, Inc. (QCOM), also clocked in a fairly robust gain of 1,324%.