Bank of America's chief investment strategist, Michael Hartnett, went searching for a historical precedent, and found one hidden within the 10 largest IPOs in market history.
In his latest "The Flow Show" note, Hartnett analyzed not the IPO stocks themselves, but the performance of each company's home-market equity index over the following three, six, nine and 12 months after the listing.
The question Hartnett is really asking is whether a giant listing tells you anything about what stocks do next.
The answer is that it depends entirely on which giant you pick.
Read Also:
SpaceX IPO Filing Lands: First Look Inside Elon Musk's Public Offering
10 Largest IPOs Ever, Home-Index Performance After Listing
Company
Index Tracked
Date
Size
Index Forward Return (%): +3M
Index Forward Return (%): 6M
Index Forward Return (%): 9M
Index Forward Return (%): 12M
Saudi Aramco
Tadawul
Dec ’19
$26bn
-5%
-8%
0%
+10%
Alibaba Group Holding Ltd. (NYSE:BABA)
Shanghai Composite
Sep ’14
$22bn
+32%
+51%
+119%
+38%
SoftBank
Nikkei
Dec ’18
$21bn
-1%
-2%
0%
+10%
NTT
Nikkei
Oct ’98
$18bn
-2%
+17%
+30%
+23%
Visa Inc. (NYSE:V)
S&P 500
Mar ’08
$18bn
+2%
-6%
-34%
-43%
AIA Group
Hang Seng
Oct ’10
$18bn
+3%
-1%
-8%
-22%
Enel
Euro Stoxx 50
Nov ’99
$17bn
+22%
+36%
+29%
+26%
“Facebook” Meta Platforms Inc. (NASDAQ:META)
S&P 500
May ’12
$16bn
+8%
+5%
+16%
+25%
General Motors Co. (NYSE:GM)
S&P 500
Nov ’10
$16bn
+13%
+13%
0%
+7%
ICBC
Shanghai Composite
Oct ’06
$14bn
+54%
+102%
+118%
+237%
Source: Bank of America
Alibaba And ICBC Were The “Rocket Fuel”
Two listings stand apart.
When Alibaba Group Holding Ltd. debuted in September 2014 and Industrial and Commercial Bank of China listed in October 2006, the Shanghai Composite and Chinese equities surged ...
