It’s hard to turn $10,000 into $1 million, but if you’re looking, one of the best places to find such an opportunity is the IPO market, where investors can get a chance to buy a company’s stock in its early years.
It takes time — maybe a decade or more — but these magic multipliers happen. And besides, aren’t hundred-fold returns worth the wait?
Many optimistic investors hope Facebook might be the next 100x darling. Whether it will remains to be seen, but we might get a better idea by examining other former IPO breakouts.
When looking at past examples of IPOs that hit the “Franklin multiple,” you see some interesting themes. The companies started with a focus on a core market, but they continued to fuel breakout growth — revenues ramps often hit 100%-plus year-over-year — through both innovation and entering new categories and markets.
The following five IPOs mostly fit the mold — with their own unique twists — and eventually turned $10,000 investments into $1 million:
A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.
Comments are currently unavailable. Please check back soon.