Past IPOs: will Facebook be a Google or a Netscape?

FACEBOOK'S IPO is imminent, prompting much excitement among investors - and debate over whether the social network is overvalued. At a moment like this it is instructive to look back at the highs and lows of past internet company flotations.

Netscape, 1995
Netscape's boom to bust story is one Facebook will be desperately hoping to avoid. The internet browser, at the time the only serious rival to Internet Explorer, had a rollercoaster first day in November 1995. Offered for $28 a share, the price nearly tripled to $75 before closing at $58.25 a share. At this point the market capitalisation of the company stood at $2.9bn – a colossal sum in those days. AOL acquired the company in a 1998 $4.2bn stock-swap, only to watch it haemorrhage value as a result of producing substandard, buggy updates that users deserted in droves. Netscape was closed down in 2003.

Lastminute.com, 2000
The travel website floated on the London Stock Exchange at the height of the 'dotcom bubble' on 14 March 2000 with an opening share price of 380p. This rose to 511p before closing the day at an impressive 492.5p. Just two weeks later the share value had halved and a month later the company was trading at 30 per cent of its IPO share price. The company failed to make a net profit for the following five years, by which time it was bought by privately held Sabre Holdings. Lastminute.com has since seen a slow increase in profitability.

Google, 2004
The search engine's IPO, like Facebook's, was the subject of fevered anticipation - and doubts about its high valuation - with the result that the IPO price was a much-lower-than-expected $85. The first day, 19 August 2004, saw shares reach a high of $104.06, closing at $100.34. The Boston Globe, reporting on the flotation, made reference to a "humbled” Google. The humbling didn't last long: today, Google is valued at $612.00 a share.

LinkedIn, 2011
The social networking site for business people first traded on 19 May 2011 with an IPO share price of $45. On opening, shares climbed to a high of $122.70 before closing at $94.24. The intervening months have been mixed, however. After the expiration of lock-up restrictions, which stop shareholders selling their stock for 180 days after an IPO, a flood of new shares hit the market, sending the share price to a record low of $55.92 in November 2011. The opening day remains LinkedIn's high water mark and, at the time of writing, the price stood at $72.37. ·