5 tech IPOs from hell

By Xavier Brenner

The IPO of Alibaba Group Holding Ltd. (BABA), the Chinese e-commerce giant that just raised $25 billion, turned out to be mother of all stock debuts.

True, owning Alibaba shares comes with some real risks, including a complex corporate structure and insider selling. Still, Alibaba is up about 33% since its debut at $68 per share on September 18.

biggest-tech-ipo-flops-of-all-time

 

Not every tech company of course manages such a splashy entrance. Consider the following 5 companies below — all technologically driven, cutting edge firms in rapidly expanding markets just like Alibaba — that have had disastrous IPOs.

Here are some of the biggest tech IPO bombs in recent memory:

 

1) Pets.com

Let's stroll down memory lane, back to the start of the new millenium when the Backstreet Boys, Christina Aguilera and Kenny G. topped the Billboard charts.

Few stocks were as emblematic of the dot-com bubble as San Francisco-based Pets.com. The pet supply online retailer raised some $82 million and was well known for its sock puppet mascot.

Unfortunately, it faced an array of online rivals and brick- and-mortar pet goods companies. Its stock went from $14 to 22 cents as its prospects worsened.

Pets.com went out of business just nine months after its public offering.

 

2) King Digital

King Digital (KING) is the owner of the smash hit Candy Crush Saga mobile game, which has been been installed on more than 500 million devices using Facebook as well as iOS, and Android.

Not surprisingly, its initial public offering back in March, 2014, at $22.50 per share drew a ton of media coverage and investor attention.

The company is also a big believer in F2P, as in the free-to-play, business model. The idea is to provide games for free, build up a massive following and then rake in revenue by selling virtual goods and other services.