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The top performing social media IPOs have been volatile but sometimes very rewarding for investors over last few years.
The following is a roundup of some of the top performing social media IPOs of all time. Check out how well the early investors in these IPOs fared…
Top Performing Social Media IPOs: Twitter Inc. (NYSE: TWTR)
The latest big ticket initial public offering (IPO) to hit markets was Twitter Inc., which went public in Nov. 7, 2013. Its initial success sparked tremendous renewed interest in social media stocks, and pushed some valuations to unbelievable levels.
TWTR's IPO was one of the top performing social media IPOs in U.S. history, if you look at its initial sales and first-day gains. It was launched at a forward price-to-sales ratio of nearly 16 and trailing price-to-sales ratio of 31. The company managed to achieve a market value of $18.1 billion.
After experiencing heavy trading volume on its first day of listing, with more than 110 million shares exchanging hands, TWTR generated a staggering return of 73%. (The IPO was priced at $26 and it closed that day at $44.90 per share.)
But the rally in Twitter stock has been volatile. After its first-day gains, the stock surged through December and hit its peak of $74.74 later on Dec. 26. Since that day, shares have been gradually deflating to the point where currently Twitter is trading right around the price at which it closed on the listing day itself, at $45.25 as of April 17.
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Top Performing Social Media IPOs: Facebook Inc. (Nasdaq: FB)
Social media giant Facebook has also seen as a blockbuster IPO. Facebook's initial public offering was priced at $38, which made it reasonably expensive at 22 times trailing price-to-sales. It looked as though the Facebook IPO left little on the table for investors, and indeed, the stock plunged to nearly half its listing price last year.
However, the rally from sub-20 levels has resurrected FB stock and has brought it in green again. It traded around $60 on April 17, boosting its net return to investors nearly 58% from the IPO price. FB shares are up 7.85% in 2014, and the company looks to continue its rise this year.
Top Performing Social Media IPOs: LinkedIn Corp. (NYSE: LNKD)
LinkedIn's initial public offering priced at $45 in May 2011, and the stock more than doubled that day, closing at $94.25 – a more than 109% gain. Its public debut tripled its market valuation from $3 billion to $9 billion in a single day. The IPO price of LinkedIn left significant value on the table for the investors, as the IPO price to sales ratio was only around 8 times.
After a volatile rest of 2011, LNKD has steadily climbed. It peaked in September 2013 a little over $255 per share and has since slowly fallen to $175.42 per share as of April 17. LNKD stock is up 88.44% since its initial offering price, but down 19.1% so far in 2014.
Along with Facebook, this top performing social media IPO looks promising in terms of future growth. It will likely benefit from a series of acquisitions it's made to help diversify its offerings to consumers.
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