The biggest IPOs in history, and what happened next

When discussing an Initial Public Offering (IPO), there are several factors to take into account. The bottom line? The biggest IPO is not always the best investment. Our special contributor and Daily Telegraph columnist David Stevenson explores more. 

Few events in financial markets capture investors’ attention quite like a major IPO. When a highly anticipated company decides to go public, media coverage intensifies, investors debate its prospects, and expectations often rise to ambitious levels.

The recent SpaceX listing has reignited the discussion around the role of IPOs in modern markets. On the one hand, these deals give investors access to businesses that have spent years growing behind closed doors in private markets. On the other, history suggests that excitement and long-term returns do not always go hand in hand.

The resurgence of mega-IPOs also comes at an interesting time. After several years of relatively subdued issuance, a number of large technology and Artificial Intelligence companies (including OpenAI and Anthropic) are considering public listings. If even a portion of these plans materialise, investors could soon be presented with a new generation of publicly traded companies carrying enormous valuations and equally lofty expectations.

For investors, however, the key question is not how large an IPO is, but what happens afterwards. Is the size of a listing a reliable indicator of future returns? Or does history tell a more nuanced story?

To answer that question, it is worth looking back at some of the largest IPOs of the past few decades and comparing the excitement surrounding their market debut with the outcomes that followed.

From IPO to index

It’s worth noting that there’s a good chance that if you own a global equities fund, especially a tracker one (or ETF), you’ll probably, by default, end up owning SpaceX stock very soon.

That’s because SpaceX and its peers will almost certainly find their way into key equity benchmarks. According to Jamie Gordon, the editor of specialist website ETF Stream, the Nasdaq index has recently adopted “a fast entry rule that will enable the inclusion of mega IPOs after just 15 days into its headline Nasdaq-100 Index, the benchmark tracked by more than $600bn of ETF assets globally.”

The ‘rival’ index group, S&P Dow Jones Indices, is also considering a rule change that would reduce the waiting period for mega-cap listings to six months from 12 months and potentially waive a profitability requirement. Only SpaceX is currently profitable, while Anthropic and OpenAI remain deeply unprofitable.

It doesn’t take much maths to work out that, on paper, all three of these AI related could be worth 7-8% of it. MSCI has suggested that SpaceX alone could become the 13th-largest stock in its global index, a rank currently held by the bank JPMorgan Chase. Over on Nasdaq, NH Investment & Securities estimates that SpaceX could account for 6.6% of the Nasdaq-100, OpenAI for 3.2%, and Anthropic for 1.4%. That said, in reality, the effect on your global and US equity portfolio is likely to be much smaller. That’s because the companies running the indices probably won’t use the headline weighting but a float-adjusted weighting, i.e. they will only include the actual percentage of shares that float freely on the market.

Another concern is the impact of these IPOs on the broader US stock market. The sheer size of these IPOs could drain liquidity from other popular Magnificent 7 stocks. These concerns are probably overblown, though, as there’s no real evidence that has happened Since SpaceX’s IPO on 11 June, Nvidia shares have essentially tracked sideways in the low‑200s, oscillating around 205–210 USD rather than selling off aggressively.

Analysts at HSBC reckon that total US IPO issuance, including mega caps, could reach over $250bn this year, making it the heaviest year for primary US issuance since 2021 although the bank’s analysts argue that there is sufficient global market demand to absorb these flows. US ETFs, for instance, have taken in around $390bn year-to-date, a monthly pace of $80bn (source Bloomberg). Corporate demand is also substantial, with buyback announcements totalling $805bn year-to-date, 17% or $120bn above 2025 levels.

Some historical context

OK, so SpaceX is a big deal, and if all three AI IPOs go ahead, we’ll have seen something truly extraordinary the birth of three giant tech leviathans with very little trading profit (or none at all), boasting a combined market cap in the trillions of dollars. This is almost unprecedented in the history of global investing. There have been plenty of multi-billion-dollar IPOs, but nothing quite at this scale. It’s worth noting that the combined proceeds of the ten largest IPOs in history prior to SpaceX were a measly $202 bn, i.e., the SpaceX IPO on its own is more than one third of that number.

The table below lists the top ten global IPOs from the last few decades. It’s from a US firm called Renaissance Capital, which tracks IPOs – we’ll come back to them towards the end – and it places SpaceX in its wider, historical context.

The only recent IPO that comes even remotely close to the SpaceX deal is that of Saudi oil giant Aramco. Saudi Aramco’s December 2019 IPO raised $25.6 billion, eclipsing Alibaba’s five-year-old record and briefly pushing the company’s market capitalisation to $2 trillion, making it the most valuable listed company, ahead of Apple at the time. The stock surged 10% on its opening day on the local Tadawul exchange, hitting the daily price-movement limit in the first moments of trading. Crown Prince Mohammed bin Salman had originally wanted a $2 trillion valuation, but only got $1.7 trillion as well as a dual listing in New York or London. The slight snag is that international investors weren’t keen, and the deal ultimately stayed domestic, with just 1.5% of the company sold to the public. For all the fanfare of that record-breaking IPO, Aramco’s stock has spent much of the time since then trading in a relatively narrow band, a handy reminder that size and stature don’t always translate into market-beating returns.

A few years before Aramco, Chinese tech giant Alibaba grabbed the headlines. Alibaba listed on the NYSE in September 2014, raising $21.8 billion. Shares were priced at $68, opened at $92.70, and closed the first day at $93.89, a near-38% first-day return.

Truth be told, the early years of Alibaba as a public company were turbulent. A year after the IPO, the stock sat at around $65, below the issue price. But by January 2020, the stock had reached $230, a gain of around 238% from the IPO price. Then came the regulatory crackdown on China’s tech sector, Jack Ma’s run-in with Beijing’s authorities, and the suspension of the Ant Group IPO that would have been even bigger than Alibaba’s own debut.

Top ten global IPOs from the last few decades

Going even further back in time, Japanese IPOs were once the flavour of the moment. NTT DoCoMo’s 1998 listing, for instance, raised $18.1 billion, then a world record, sending the Tokyo Stock Exchange into a frenzy. Japan had a voracious appetite for its own privatisation wave (NTT, the parent company, had itself been listed in 1987), and DoCoMo, the mobile arm, was seen as the crown jewel of a country that was, for a brief period, ahead of the world in mobile technology. First-day gains were strong, around 36%, and the company became a household name across Asia.

Japanese firm SoftBank’s December 2018 listing of its domestic telecoms arm raised $21.3 billion, making it the largest Japanese IPO ever at the time. The listing was almost entirely sold to domestic retail investors, and the stock fell sharply in subsequent weeks and months as those investors became disappointed.

Arguably, before SpaceX, no IPO in modern history probably generated more anticipation than Facebook’s May 2012 debut on Nasdaq. It raised $16 billion, valued the company at $104 billion, and immediately collapsed under the weight of its own hype. Technical glitches delayed trading for 30 minutes, and when it finally opened, the stock barely moved on its first day, closing at $38.23 at an offering price of $38. In the months that followed, it fell more than 50%, and for a time the company faced serious questions about whether mobile was going to be its downfall rather than its future.

Among the mega-IPOs, Visa’s stands out as something of a successful anomaly a deal impeccably timed in the wrong direction, yet one of the greatest IPO investments in history. Visa went public in March 2008, just as the financial crisis was tearing through global markets. It was priced at 44 dollars in March 2008, weeks before the financial system nearly came apart, climbed about 28 per cent on its first day, and has since delivered a total return of the order of two thousand per cent, splitting four for one along the way and compounding at better than twenty per cent a year.

One last point on these mega IPOs – notice some names you might think should be on the list are missing. Apple raised about $122 million in 1980, Amazon raised $54 million in 1997 and Microsoft raised $61 million in 1986. None of the companies that came to define modern markets needed anything close to a record-breaking float, because in their day, a few tens of millions was a serious sum to raise at an IPO and the venture capital industry that now keeps firms private for a decade barely existed.

What the data actually says 

Anyone trying to strip away the names and narratives from the data to see the big signals usually ends up with the academic work of Jay Ritter of the University of Florida, who has spent four decades assembling the definitive record of how IPOs behave.

Two findings from his large dataset stand out.

The first is the famous first-day pop. IPOs are, on average, underpriced, meaning they close above the offer price on the first day. Across more than 14,000 American IPOs since 1960, Ritter reports that the average stock has jumped about 17.7 per cent on its opening day, implying that the issuer effectively left money on the table.

The second finding is less positive. Ritter’s foundational 1991 study found that 1,526 US IPOs from 1975 to 1984 produced an average three-year buy-and-hold return of just 34.5%, compared to 61.9% for size-matched control firms an underperformance gap of around 27 percentage points over three years. Updated data through December 2025 show persistent underperformance of approximately 2.1% per year relative to size- and book-to-market-matched benchmarks, with the strongest effect for smaller, younger companies going public during hot-issue periods. Across 9,343 operating-company IPOs tracked from 1980 to 2024, the pattern is remarkably consistent. Broader market analyses place the drag at around 3.3% per year over five years.

When Ritter sorts his sample by the size of the business going public, the overall picture changes again. IPOs of companies with more than a billion dollars in trailing sales actually keep pace with or modestly beat their benchmarks over three years, while the tiny speculative names drag down the average. In Ritter’s full sample, nearly four in ten IPOs were down more than fifty per cent three years on, yet a sliver returned several hundred or even several thousand per cent, which is exactly why the average looks OK while the typical experience is grim.

But it’s not just academics who’ve been digging around inside the IPO data set. More than a few Wall Street firms specialise in IPOs, notably Renaissance Capital. Helpfully, they’ve even developed their own IPO stock market index, which allows us to track what’s happened to actual IPOs in recent years. The index is run with the FTSE Russell Group and comes in various global and regional iterations.

Perhaps unhelpfully for the success of Renaissance and its index, returns haven’t been that great. Using end-of-May 2026 data for the FTSE Global series, the five-year absolute return for this Renaissance index has been -16.8%, versus 75% for the FTSE All World index, although the three-year return at 65% is much better (versus 85% for the FTSE All World). The one-year return for the index is 13.6% (12.3% for the FTSE All World). Looking at annualised returns, the index’s five-year annual return is an underwhelming -3.5% pa. For reference, the 2025 return was -17.8%. Current top stocks in their index include Kioxia Holdings from Japan, Astera Labs from the USA, and Galderma Group AG from Switzerland.

The bottom line

What the history of mega-IPOs teaches you, ultimately, is that the size of the deal tells you very little about what comes next. Many of the biggest IPOs have been delivered by state-owned oil companies seeking to fund sovereign wealth diversification, or by Chinese banks at the peak of an investment cycle, or even by Japanese telecoms carriers riding the privatization wave. Some (think Visa) have been spectacular long-run investments. Others (think Enel, SoftBank’s telecoms arm) have disappointed. Most sit somewhere in between.

Looking at Jay Ritter’s extensive data highlights massive shifts in the age and maturity of companies going public. Decades ago, companies like Amazon and Microsoft went public relatively early in their lifecycles, allowing retail investors in public markets to participate in their most explosive growth years. Today, venture capital markets are so deep and flush with cash that companies stay private for much longer.

Ritter’s treasure trove of data also highlights other trends. There’s been the explosive boom and subsequent catastrophic bust of Special Purpose Acquisition Companies, or SPACs, which offered a supposed backdoor to the public markets before largely collapsing under the weight of terrible performance and regulatory scrutiny. We have also seen the rise of Direct Listings, a method championed by companies like Spotify and Slack. In a direct listing, a company bypasses the traditional investment bank underwriting process entirely, choosing simply to float its existing shares on the exchange. This method is a direct rebellion against the “money left on the table”, in theory, allowing the market to find the true clearing price without enriching Wall Street middlemen. Ironically, I know of no other company considering a direct listing. So much for the rebellion against Wall Street.

My bottom line? I tend to adopt a default attitude of avoiding IPOs unless I have a high conviction that the company will deliver impressive results. In particular, I make a point of avoiding IPOs in which the ‘seller’ issuing the shares is a private equity firm – bitter experience has taught me here in the UK that these IPOs tend to be hugely disappointing. That said, if you believe that a business has a fantastic competitive moat and isn’t insanely overvalued, then buying into an IPO can be a rewarding endeavour. Just don’t bet on it being a long-term success.

More to the point, I think even if you find the right business at the right price, you probably won’t get access to the IPO, and history suggests waiting a few weeks/months/years until the enthusiasm fades and the share price falls back again – and you can buy that newbie stock at a better price than the IPO.

Please remember that when investing, your capital is at risk. The value of your portfolio with Moneyfarm can go down as well as up and you may get back less than you invest. Past performance is not a reliable indicator of future performance. The views expressed here should not be taken as a recommendation, advice or forecast. Investing is usually for the long term, but it depends on the circumstances of each individual. If you are unsure investing is the right choice for you, please seek financial advice.