Initial Public Offerings: Technology Stock IPOs

Jay R. Ritter
Cordell Professor of Finance
University of Florida
352.846-2837 voice
https://site.warrington.ufl.edu/ritter/
December 10, 2020

Index

Table 4: Median Age and Fraction of IPOs with VC- and Buyout-backing, 1980-2019
Table 4a: Median Price-to sales Ratios of Tech-stock IPOs, 1980-2019
Table 4b: Profitability and Median Sales of Technology and Biotech IPOs, 1980-2019
Table 4e: The number of Tech stock IPOs and their mean and median post-issue market values
Table 9: Fraction of IPOs with Negative Earnings, 1980-2019
Table 16c: Long-run Returns Measured from the Offer Price on Tech and non-Tech Stock IPOs
Excluding the Internet Bubble, 1980-2018
Table 16d: Long-run Returns Measured from the First Closing Market Price on Tech and non-Tech Stock
IPOs Excluding the Internet Bubble, 1980-2018
Table 23: Dual Class IPOs, by Tech and Non-Tech, 1980-2019
Figure 2: Fraction of IPOs with Negative EPS and Fraction of Tech Stocks, 1980-2019
 Table 4 (tech IPOs columns updated December 10, 2020)

Median Age and Fraction of IPOs with VC and Buyout Backing, 1980-2019

There are 8,610 IPOs after excluding those with an offer price below $5.00 per share, unit offers,
ADRs, closed-end funds, oil & gas limited partnerships, acquisition companies, REITs, bank and
S&L IPOs, and firms not listed on CRSP. Missing numbers are supplemented by direct inspection
of prospectuses on EDGAR, information from Dealogic for IPOs after 1991, Howard and Co.’s
Going Public: The IPO Reporter from 1980-1985, the Graeme Howard-Todd Huxster collection
of IPO prospectuses for 1975-2006, and the Stanford GSB microfiche collection of registration
statements form the 1980s. Tech stocks are defined as internet-related stocks plus other technology
stocks, not including biotech. Loughran and Ritter (2004) list the SIC codes in their appendix 3
and sources of founding dates in appendix 1. Age is defined as the year of the IPO minus the year
of founding. For buyout-backed IPOs, the founding date of the predecessor company is used. For
rollups, the founding date of the oldest acquired company is used in most cases. Private equity
(PE) or buyout-backed IPOs were restricted to “reverse LBOs” in the 1980s and 1990s. Jerry Cao
has assisted with providing information on which IPOs are buyout-backed.

The financial backers of some companies are easy to classify, such as when Sequoia Capital and
Kleiner Perkins invested in Google, or when KKR invested in Dollar General. But other situations
involve growth capital investing, as when Warburg Pincus finances a company that rolls up some
doctors’ offices. With just two categories (VC and buyout), there is some arbitrariness in the
categorization of IPOs backed by growth capital investors. 404 growth capital-backed IPOs are
classified as VC-backed.

The last column gives the percentage of tech stocks that have VC backing.

The definition of technology stocks has been changed from that in Loughran and Ritter (2004
Financial Management), with SIC=3559, 3576, and 7389 added to tech. Some 7389 (business
services) companies have had their SIC codes changed into non-tech categories, such as consulting
and two new SIC codes: 5614 for telemarketing firms and 7388 for non-tech business services
such as Sotheby’s Auctions.

(table on the next page)

 Number Median VC-backed Buyout-backed Technology IPOs
Year of IPOs Age No. % No. % No. % VC-backed
1980 71 6 23 32% 1 1% 22 64%
1981 192 8 53 27% 1 1% 72 40%
1982 77 5 21 27% 2 3% 42 36%
1983 451 7 115 25% 12 3% 173 38%
1984 171 8 45 26% 3 2% 50 52%
1985 186 9 39 21% 18 10% 37 43%
1986 393 8 79 20% 42 11% 77 40%
1987 285 8 66 23% 41 14% 59 66%
1988 105 8 32 30% 9 9% 28 61%
1989 116 8 40 34% 10 9% 35 66%
1990 110 9 42 38% 13 12% 32 74%
1991 286 10 116 41% 72 25% 71 63%
1992 412 10 138 33% 98 24% 115 59%
1993 510 9 172 34% 79 15% 127 69%
1994 402 8 129 32% 22 5% 115 56%
1995 462 8 186 40% 30 7% 205 55%
1996 677 7 265 39% 34 5% 276 55%
1997 474 10 133 28% 38 8% 174 42%
1998 281 9 77 27% 30 11% 113 48%
1999 476 5 275 58% 31 7% 370 66%
2000 380 6 242 64% 32 8% 260 69%
2001 80 12 32 41% 21 27% 23 70%
2002 66 15 23 35% 20 30% 20 65%
2003 63 11 24 38% 21 33% 18 61%
2004 173 8 79 46% 43 25% 61 66%
2005 159 13 46 29% 67 42% 45 49%
2006 157 13 54 34% 68 43% 48 52%
2007 159 9 71 45% 31 19% 76 66%
2008 21 14 9 43% 3 14% 6 67%
2009 41 15 12 29% 19 46% 14 43%
2010 91 10 40 44% 27 30% 33 73%
2011 81 11 44 54% 18 22% 36 81%
2012 93 12 48 52% 28 30% 40 87%
2013 157 12 76 48% 36 23% 45 73%
2014 206 11 129 63% 38 18% 51 71%
2015 118 10 72 61% 22 19% 38 74%
2016 75 10 46 61% 14 19% 21 71%
2017 107 12 62 58% 19 18% 30 77%
2018 134 10 88 66% 14 10% 39 77%
2019 112 10 76 69% 10 9% 37 70%
1980-1989 2,047 8 513 25% 139 7% 595 46%
1990-1998 3,614 8 1,258 35% 416 12% 1,228 55%
1999-2000 856 5 517 60% 63 7% 630 68%
2001-2019 2,093 11 1,029 49% 519 25% 681 69%
1980-2019 8,610 8 3,317 39% 1,137 13% 3,134 59%
 Table 4a (updated December 10, 2020)

Technology Company IPOs, 1980-2019

There are 3,134 tech stock IPOs from 1980-2019, after excluding those with an offer price below
$5.00 per share, unit offers, ADRs, closed-end funds, natural resource limited partnerships (and
most other LPs, but not buyout firms such as Carlyle Group), acquisition companies, REITs, bank
and S&L IPOs, and firms not listed on CRSP. Missing and questionable numbers from the SDC
new issues database are supplemented by direct inspection of prospectuses on EDGAR,
information from Dealogic for IPOs after 1991, Howard and Co.’s Going Public: The IPO
Reporter from 1980-1985, and the Graeme Howard-Todd Huxster collection of IPO prospectuses
for 1975-2006. Tech stocks are defined as internet-related stocks plus other technology stocks
including telecom, but not including biotech. Loughran and Ritter (2004) list the SIC codes in their
appendix 3 and sources of founding dates in appendix 1. The definition of technology stocks has
been changed from that in Loughran and Ritter (2004 Financial Management), with SIC=3559,
3576, 3844, and 7389 added to tech. Some 7389 (business services) companies have had their SIC
codes changed into non-tech categories, such as consulting and two new SIC codes that I have
made up: 5614 for telemarketing firms and 7388 for non-tech business services such as Sotheby’s
Auctions. I have also added the S.E.C.’s computer communications equipment code of 3576 for
21 companies, including Cisco Systems.

For the column with VC-backed IPOs, there are 3,134 IPOs including both technology and non-
technology companies.

For buyout-backed IPOs, the founding date of the predecessor company is used. Price-to-sales
ratios are computed using both the offer price (OP) and the first closing market price (MP) for
computing the market capitalization of equity. Market cap is calculated using the post-issue shares
outstanding, with all share classes included in the case of dual-class companies. The undiluted
number of shares is used, which is some cases (e.g., Facebook, Twitter, and Castlight Health)
understates the market cap due to the existence of substantial amounts of in-the-money employee
stock options that are highly likely to be exercised. Sales are the last twelve months (LTM)
revenues as reported in the prospectus. The median sales, in millions, is expressed in both nominal
dollars and in dollars of 2014 purchasing power using the CPI. The median age, in years, is the
number of years since the calendar year of the founding date and the calendar year of the IPO. The
percentage of IPOs that are profitable measures profitability using trailing LTM earnings (usually
using after extraordinary items earnings, and usually using pro forma numbers that are computed
assuming that any recent or concurrent mergers have already occurred, and the conversion of
convertible preferred stock into common stock). In some cases, last fiscal year earnings are used
when LTM earnings are unavailable.

Even concepts like market cap (for the price-to-sales ratios) become ambiguous when you realize
that companies like Facebook have many deep in-the-money options outstanding, so whether
you use the fully diluted number of shares or the undiluted number can affect the calculations
substantially for some companies. Need to update technology proceeds.

(table on the next page)

 Number Median
of Tech Proceeds in $millions Price-to-sales Median sales, $mm Median %
Year IPOs VC-backed Technology OP MP Nominal $2014 age profitable
al
1980 22 388 378 3.4 3.8 16.2 48.8 6.5 91%
1981 72 648 837 3.5 3.6 12.9 34.8 9 88%
1982 42 490 648 4.2 4.5 10.5 26.2 5 83%
1983 173 2,768 3,271 5.9 6.6 8.6 20.6 6 71%
1984 50 614 551 2.4 2.5 9.8 22.4 6.5 80%
1985 37 667 375 2.3 2.4 13.4 29.7 7 84%
1986 77 1,558 1,217 3.4 3.6 13.0 27.8 6 74%
1987 59 1,315 1,324 3.2 3.2 17.8 37.4 5 86%
1988 28 674 888 3.0 3.4 24.0 48.5 5.5 79%
1989 35 869 748 3.4 4.0 31.5 60.9 6 77%
1990 32 1,085 747 3.6 4.0 28.6 52.5 8.5 94%
1991 71 3,887 2,738 3.2 3.6 34.6 60.0 9 75%
1992 115 4,970 5,871 3.5 3.7 22.4 38.0 8 65%
1993 127 5,929 5,715 3.0 3.6 27.0 44.3 8 74%
1994 115 3,691 3,583 3.7 4.2 21.0 33.7 8 70%
1995 205 7,023 9,786 4.6 5.8 21.4 33.3 8 71%
1996 276 11,623 16,185 6.9 8.2 16.7 25.2 7 47%
1997 174 4,994 7,447 5.2 5.7 21.2 31.1 8 50%
1998 113 3,882 8,118 8.8 11.9 22.1 32.0 7 36%
1999 370 22,012 33,512 26.5 43.0 12.1 17.2 4 14%
2000 260 23,304 42,442 31.7 49.5 12.0 16.6 5 14%
2001 23 2,658 5,773 8.1 13.4 24.6 32.9 9 30%
2002 20 1,956 2,587 2.9 3.1 95.2 125.8 9 40%
2003 18 1,789 2,242 4.1 4.6 86.2 111.0 7 39%
2004 61 7,183 9,064 6.4 7.1 55.5 70.1 8 44%
2005 45 3,676 6,994 4.5 4.5 68.0 83.5 9 36%
2006 48 4,662 4,873 5.5 6.3 57.6 67.9 9 50%
2007 76 9,820 12,572 6.5 7.8 71.2 79.8 8 30%
2008 6 863 1,194 4.9 5.7 156.7 173.6 14 67%
2009 14 1,697 4,126 3.0 3.6 174.3 193.1 11 71%
2010 33 3,873 4,347 3.4 3.9 119.5 129.0 11 64%
2011 36 8,603 9,412 6.1 6.6 141.3 150.1 10 36%
2012 40 21,031 20,887 4.5 5.0 113.4 117.1 9.5 43%
2013 45 11,553 8,662 5.3 6.1 105.8 107.5 9 27%
2014 51 18,058 9,551 5.4 6.6 88.7 88.7 11 16%
2015 38 9,319 10,087 5.3 6.2 130.8 130.9 11 26%
2016 21 5,945 2,510 4.2 4.3 109.5 108.2 10 29%
2017 30 10,878 7,844 5.0 6.3 188.4 181.5 13 17%
2018 39 16,412 12,246 7.7 11.7 179.2 169.1 12 15%
2019 37 26,693 22,811 7.8 10.4 196.6 182.8 11 30%
2020 YTD 37 13.5 23.9 201.3 13 16%
1980-2019 3,134 269,057 304,164 5.9 6.9 22.9 37.5 7 49%
 Table 4b (updated June 24, 2020)

Technology and Biotechnology Company IPOs, 1980-2019

There are 3,126 tech and 834 biotech IPOs from 1980-2019, after excluding those with an offer
price below $5.00 per share, unit offers, ADRs, closed-end funds, partnerships, acquisition
companies, REITs, bank and S&L IPOs, and firms not listed on CRSP. Missing and questionable
numbers from the SDC new issues database are supplemented by direct inspection of prospectuses
on EDGAR, information from Dealogic for IPOs after 1991, Howard and Co.’s Going Public: The
IPO Reporter from 1980-1985, and the Graeme Howard-Todd Huxster collection of IPO
prospectuses for 1975-2006. Tech stocks are defined as internet-related stocks plus other
technology stocks including telecom, but not including biotech. Loughran and Ritter (2004) list
the SIC codes in their appendix 3 and sources of founding dates in appendix 1. The definition of
technology stocks has been changed from that in Loughran and Ritter (2004 Financial
Management), with SIC=3559, 3576, and 7389 added to tech. Some 7389 (business services)
companies have had their SIC codes changed into non-tech categories, such as consulting and two
new SIC codes that I created: 5614 for telemarketing firms and 7388 for non-tech business services
such as Sotheby’s Auctions. I have also added the S.E.C.’s computer communications equipment
code of 3576 for 21 companies, including Cisco Systems.

Biotech is defined as SIC=2830, 2833, 2834, 2835, 2836, and 8731.

Sales are the last twelve months (LTM) revenues as reported in the prospectus. The median sales,
in millions, are expressed in dollars of 2014 purchasing power using the CPI. Pro forma numbers
are usually used if there have been recent mergers or mergers that coincide with the IPO. The
percentage of IPOs that are profitable measures profitability using trailing LTM earnings (usually
using after extraordinary items earnings, and usually using pro forma numbers that are computed
assuming that any recent or concurrent mergers have already occurred, and the conversion of
convertible preferred stock into common stock). In some cases, last fiscal year earnings are used
when LTM earnings are unavailable.

(table on the next page)

 Number of IPOs % Profitable Median sales ($2014, millions)
Year Tech Biotech Other Tech Biotech Other Tech Biotech Other
1980 22 3 46 91% 67% 70% 48.8 17.1 64.4
1981 72 10 110 88% 30% 85% 34.8 4.1 36.1
1982 42 2 33 83% 50% 79% 26.2 3.3 24.9
1983 173 21 257 71% 43% 86% 20.6 6.1 73.9
1984 50 2 119 80% 100% 85% 22.4 113.4 57.9
1985 37 5 144 84% 40% 87% 29.7 10.4 88.5
1986 77 25 291 74% 32% 84% 27.8 9.0 79.2
1987 59 11 216 86% 18% 85% 38.4 5.9 92.3
1988 28 2 75 79% 0% 85% 48.5 8.2 191.1
1989 35 4 77 77% 0% 82% 60.9 2.2 101.7
1990 32 4 75 94% 0% 87% 53.5 3.8 106.4
1991 71 33 183 74% 15% 88% 59.9 5.7 128.8
1992 115 33 265 65% 18% 80% 38.3 2.2 117.3
1993 127 28 355 74% 21% 75% 44.3 2.6 100.7
1994 115 20 266 70% 20% 80% 33.7 2.6 87.5
1995 205 22 235 71% 14% 75% 33.3 4.2 98.9
1996 276 47 356 47% 17% 73% 25.2 3.9 82.7
1997 174 22 279 50% 14% 77% 31.6 8.2 93.0
1998 113 12 156 36% 42% 69% 32.0 18.9 104.1
1999 370 11 95 14% 27% 63% 17.2 16.9 162.9
2000 260 56 64 14% 11% 50% 16.6 5.5 164.9
2001 23 6 50 30% 0% 66% 32.9 0.2 473.9
2002 20 5 41 40% 40% 63% 125.8 189.7 569.9
2003 18 8 37 39% 0% 76% 111.0 0.1 519.1
2004 61 30 82 44% 7% 70% 70.1 4.4 250.2
2005 45 16 98 36% 13% 70% 83.5 15.2 266.3
2006 48 24 85 50% 8% 80% 67.9 4.0 393.3
2007 76 19 65 30% 5% 73% 79.8 1.6 268.8
2008 6 1 14 67% 0% 57% 173.6 0.3 223.6
2009 14 3 24 71% 67% 71% 193.1 41.7 498.2
2010 33 11 47 64% 0% 70% 129.0 0.0 348.6
2011 36 8 37 36% 0% 59% 150.1 3.3 343.4
2012 40 10 43 43% 0% 77% 111.7 0.5 353.3
2013 45 41 71 27% 10% 58% 107.5 10.9 421.9
2014 51 74 81 16% 7% 57% 88.7 0.0 271.0
2015 38 42 38 26% 0% 66% 130.9 0.0 171.3
2016 21 25 29 29% 8% 59% 108.2 0.9 645.4
2017 30 32 45 17% 0% 42% 181.5 0.0 421.1
2018 39 58 37 15% 0% 51% 169.1 0.0 455.7
2019 37 48 28 31% 2% 50% 207.0 0.0 143.5
2001-19 681 461 951 35% 5% 65% 106.0 0.2 340.8

1980-2019 3,134 834 4,648 49% 12% 76% 37.5 2.6 111.4
 Table 4e (MV not adjusted for inflation) Tech IPOs, 1980-2019
No. of Proceeds, Number Market value, at first market price, $millions
Year Tech IPOs $millions doubling Total Mean Median
1980 22 378 0 $3,054 $139 $64
1981 72 837 0 $4,509 $63 $42
1982 42 648 0 $3,360 $80 $30
1983 173 3,271 2 $17,289 $100 $45
1984 50 551 1 $2,674 $53 $30
1985 37 375 0 $1,595 $43 $29
1986 77 1,217 0 $6,163 $80 $45
1987 59 1,324 0 $7,607 $131 $59
1988 28 888 0 $5,464 $195 $102
1989 35 748 0 $3,660 $105 $65
1990 32 747 0 $3,588 $116 $83
1991 71 2,738 0 $11,848 $169 $124
1992 115 5,871 1 $21,916 $192 $103
1993 127 5,715 1 $30,332 $239 $86
1994 115 3,583 1 $16,653 $145 $80
1995 205 9,786 11 $50,089 $244 $139
1996 276 16,185 5 $98,229 $359 $138
1997 174 7,447 2 $45,748 $264 $113
1998 113 8,118 12 $64,221 $568 $234
1999 370 33,512 114 $449,092 $1,214 $493
2000 260 42,442 69 $516,962 $1,988 $702
2001 23 5,773 0 $27,365 $1,190 $367
2002 20 2,587 0 $12,340 $617 $339
2003 18 2,242 0 $9,340 $519 $422
2004 61 9,064 0 $59,399 $974 $325
2005 45 6,994 0 $26,149 $581 $307
2006 48 4,873 0 $23,820 $496 $352
2007 76 12,572 0 $89,729 $1,181 $560
2008 6 1,194 0 $5,756 $959 $813
2009 14 4,126 0 $16,311 $1,165 $646
2010 33 4,347 0 $24,833 $753 $548
2011 36 9,412 1 $83,414 $2,317 $824
2012 40 20,887 1 $125,817 $3,145 $686
2013 45 8,662 1 $76,923 $1,709 $812
2014 51 9,552 2 $79,706 $1,563 $715
2015 38 10,087 0 $74,810 $1,969 $815
2016 21 2,510 1 $23,056 $1,098 $841
2017 30 7,844 0 $64,714 $2,157 $1,129
2018 39 12,246 1 $94,325 $2,419 $1,928
2019 37 22,811 0 $223,761 $6,516 $2,283
1980-2019 3,134 304,164 226 $2,505,623 $802 $192
 Table 9 (updated June 24, 2020)

Fraction of IPOs with Negative Earnings, 1980-2019

IPOs with an offer price below $5.00 per share, unit offers, ADRs, closed-end funds, partnerships,
acquisition companies, REITs, bank and S&L IPOs, and firms not listed on CRSP within six
months of the offer date are excluded. When available, I use the earnings per share for the most
recent twelve months (commonly known as LTM for last twelve months) prior to going public.
When a merger is involved, we use the pro forma numbers (as if the merger had already occurred).
I am not completely consistent in the use of earnings before or after extraordinary items. Some
extraordinary items are associated with the IPO, including gains or losses on conversion of
convertible securities at the time of the IPO, or writeups or writedowns associated with mergers. I
usually use the before extraordinary items EPS if the one-time charges are associated with the IPO.
When the trailing twelve months EPS number is unavailable, I use the most recent fiscal year EPS
number. Missing numbers are supplemented by direct inspection of prospectuses on EDGAR, EPS
information from Dealogic for IPOs after 1991, and Howard and Co.’s Going Public: The IPO
Reporter from 1980-1995. Remaining missing numbers have been found in the Graeme Howard-
Todd Huxster collection of IPO prospectuses and the Stanford Business School microfiche
collection of prospectuses from the 1980s. Don Patton of UC-Davis has tracked down a couple of
remaining missing numbers. Tech stocks are defined as internet-related stocks plus other
technology stocks, not including biotech. Loughran and Ritter (2004) list the SIC codes in their
appendix 3 and sources of founding dates in appendix 1.

Number No. with Percentage Percentage of Mean First-day Returns

Year of IPOs missing EPS Tech Stocks IPOs with EPS<0 EPS<0 EPS≥0
1980-1989 2,047 1 29% 19% 9.2% 6.8%
1990-1998 3,614 0 34% 32% 16.0% 14.3%
1999-2000 856 0 74% 78% 71.1% 41.6%
2001-2019 2,093 0 32% 58% 15.2% 14.2%

1980-2019 8,610 1 36% 40% 25.6% 12.9%

(year-by-year on the next page)

 Number No. with Percentage Percentage of Mean First-day Returns
Year of IPOs missing EPS Tech Stocks IPOs with EPS<0 EPS<0 EPS≥0
1980 71 0 31% 24% 7.1% 16.5%
1981 192 0 38% 17% 8.0% 5.4%
1982 77 0 55% 19% 6.4% 12.1%
1983 451 0 38% 22% 14.0% 8.8%
1984 171 0 29% 16% 11.1% 2.2%
1985 186 0 20% 15% 5.2% 6.6%
1986 393 1 20% 21% 8.8% 5.4%
1987 285 0 20% 17% 5.1% 5.8%
1988 105 0 27% 18% 6.0% 5.3%
1989 116 0 30% 22% 8.3% 7.9%
1990 110 0 28% 15% 9.5% 11.0%
1991 286 0 24% 24% 9.4% 12.7%
1992 412 0 28% 29% 10.2% 10.3%
1993 510 0 25% 28% 12.6% 12.8%
1994 402 0 29% 26% 8.0% 10.2%
1995 462 0 44% 30% 22.5% 21.0%
1996 677 0 40% 41% 16.7% 17.6%
1997 474 0 36% 36% 12.6% 14.9%
1998 281 0 40% 46% 32.2% 13.2%
1999 476 0 78% 76% 81.0% 40.2%
2000 380 0 68% 81% 59.4% 43.8%
2001 80 0 29% 49% 15.3% 12.8%
2002 66 0 30% 45% 5.6% 12.0%
2003 63 0 29% 44% 10.0% 13.2%
2004 173 0 35% 50% 11.9% 12.7%
2005 159 0 28% 45% 7.3% 12.8%
2006 157 0 31% 40% 7.3% 15.4%
2007 159 0 48% 55% 13.8% 14.3%
2008 21 0 29% 43% 1.8% 8.7%
2009 41 0 34% 29% 12.8% 8.6%
2010 91 0 36% 41% 6.9% 11.1%
2011 81 0 44% 57% 11.0% 17.7%
2012 93 0 43% 46% 22.4% 13.7%
2013 157 0 29% 64% 20.2% 22.3%
2014 2,051
206 0 25% 71% 17.1% 11.4%
2015 118 0 32% 70% 19.1% 19.6%
2016 75 0 28% 67% 13.2% 17.0%
2017 107 0 28% 78% 12.6% 14.8%
2018 134 0 29% 81% 20.4% 10.5%
2019 112 0 32% 77% 25.2% 17.9%

1980-2019 8,610 1 36% 40% 25.6% 12.9%

 Table 16c (updated March 10, 2020)
Long-run Returns Measured from the Offer Price on Tech and non-Tech Stock IPOs
Excluding the Internet Bubble, 1980-2018
Panel A: IPOs from 1980-2018, excluding 1999-2000, categorized by industry
Average Average 3-year Buy-and-hold Return
Number First-day Market- Style-
Industry of IPOs Return IPOs adjusted adjusted
Tech 2,460 18.4% 77.0% 28.3% 48.2%
Non-Tech 5,181 9.9% 34.6% -11.4% 1.7%
All 7,641 12.6% 48.2% 1.4% 16.6%

Panel B: Categorized by sales and industry

Average Average 3-year Buy-and-hold Return
Number First-day Market- Style-
LTM Sales of IPOs Return IPOs adjusted adjusted
Sales < $100 million
Tech 1,804 18.9% 70.3% 18.4% 42.9%
Non-Tech 2,715 10.9% 20.9% -26.5% -7.3%
Sales> $100 million
Tech 656 17.0% 95.5% 55.4% 62.9%
Non-Tech 2,466 8.9% 49.6% 5.3% 11.5%

Panel C: Profitable issuers, categorized by sales and industry

Average Average 3-year Buy-and-hold Return
Number First-day Market- Style-
LTM Sales of IPOs Return IPOs adjusted adjusted
Sales < $100 million
Tech 1,012 17.5% 70.8% 15.1% 43.1%
Non-Tech 1,470 10.6% 28.8% -22.9% -0.6%
Sales> $100 million
Tech 410 15.0% 106.0% 59.4% 71.4%
Non-Tech 2,058 9.0% 51.4% 5.8% 13.7%

Panel D: Unprofitable issuers, categorized by sales and industry

Average Average 3-year Buy-and-hold Return
Number First-day Market- Style-
LTM Sales of IPOs Return IPOs adjusted adjusted
Sales < $100 million
Tech 792 20.7% 69.7% 22.6% 42.5%
Non-Tech 1,245 11.1% 11.6% -30.8% -15.2%
Sales> $100 million
Tech 246 20.4% 78.1% 48.7% 48.8%
Non-Tech 408 8.0% 40.3% 2.7% 0.2%
 Table 16d (updated March 10, 2020)
Long-run Returns Measured from the First Closing Market Price on Tech and non-Tech
Stock IPOs Excluding the Internet Bubble, 1980-2018
Panel A: IPOs from 1980-2018, excluding 1999-2000, categorized by industry
Average Average 3-year Buy-and-hold Return
Number First-day Market- Style-
Industry of IPOs Return IPOs adjusted adjusted
Tech 2,460 18.4% 46.1% -2.7% 17.2%
Non-Tech 5,181 9.9% 23.7% -22.2% -9.2%
All 7,641 12.6% 30.9% -15.9% -0.7%

Panel B: Categorized by sales and industry

Average Average 3-year Buy-and-hold Return
Number First-day Market- Style-
LTM Sales of IPOs Return IPOs adjusted adjusted
Sales < $100 million
Tech 1,804 18.9% 39.3% -12.6% 11.9%
Non-Tech 2,715 10.9% 10.9% -36.5% -17.3%
Sales> $100 million
Tech 656 17.0% 64.6% 24.4% 31.9%
Non-Tech 2,466 8.9% 37.7% -6.5% -0.3%

Panel C: Profitable issuers, categorized by sales and industry

Average Average 3-year Buy-and-hold Return
Number First-day Market- Style-
LTM Sales of IPOs Return IPOs adjusted adjusted
Sales < $100 million
Tech 1,012 17.5% 42.6% -13.1% 15.0%
Non-Tech 1,470 10.6% 18.3% -33.4% -11.1%
Sales> $100 million
Tech 410 15.0% 74.6% 28.0% 40.0%
Non-Tech 2,058 9.0% 39.3% -6.3% 1.6%

Panel D: Unprofitable issuers, categorized by sales and industry

Average Average 3-year Buy-and-hold Return
Number First-day Market- Style-
LTM Sales of IPOs Return IPOs adjusted adjusted
Sales < $100 million
Tech 792 20.7% 35.1% -11.9% 7.9%
Non-Tech 1,245 11.1% 2.2% -40.2% -24.5%
Sales> $100 million
Tech 246 20.4% 47.8% 18.4% 18.4%
Non-Tech 408 8.0% 30.2% -7.5% -9.9%
 Table 23 (updated June 24, 2020)
Dual Class IPOs
This table lists the number of IPOs each year that have dual class shares among tech IPOs and among
non-tech IPOs. The sample is IPOs with an offer price of at least $5.00, excluding ADRs, unit offers,
closed-end funds, REITs, natural resource limited partnerships, small best efforts offers, banks and S&Ls,
and stocks not listed on CRSP (CRSP includes Amex, NYSE, and NASDAQ stocks).
Tech IPOs Non-tech IPOs All IPOs
Dual Total % Dual Total % Dual Total %
1980 0 22 0% 1 49 2.0% 1 71 1.4%
1981 2 72 2.8% 4 120 3.3% 6 192 3.1%
1982 0 42 0% 0 35 0.0% 0 77 0.0%
1983 3 173 1.7% 4 278 1.4% 7 451 1.6%
1984 2 50 4.0% 5 121 4.1% 7 171 4.1%
1985 1 37 2.7% 6 149 4.0% 7 186 3.8%
1986 3 77 3.9% 21 316 6.6% 24 393 6.1%
1987 1 58 1.7% 23 227 10.1% 24 285 8.4%
1988 3 28 10.7% 6 77 7.8% 9 105 8.6%
1989 1 35 2.9% 6 81 7.4% 7 116 6.0%
1990 0 31 0% 7 79 8.9% 7 110 6.4%
1991 7 70 10.0% 16 216 7.4% 23 286 8.0%
1992 2 114 1.8% 16 298 5.4% 18 412 4.4%
1993 3 127 2.4% 30 383 7.8% 33 510 6.5%
1994 7 115 6.1% 26 287 9.1% 33 402 8.2%
1995 8 205 3.9% 22 257 8.6% 30 462 6.5%
1996 16 274 5.8% 45 403 11.2% 61 677 9.0%
1997 10 173 5.8% 41 301 13.6% 51 474 10.8%
1998 8 113 7.0% 21 168 12.4% 29 281 10.3%
1999 22 370 5.9% 19 106 18.7% 41 476 8.6%
2000 19 260 7.3% 7 120 5.8% 26 380 6.8%
2001 2 23 8.7% 6 57 10.5% 8 80 10.0%
2002 2 20 10.0% 12 46 26.1% 14 66 21.2%
2003 3 18 16.7% 5 45 11.1% 8 63 12.7%
2004 3 61 4.9% 10 112 8.9% 13 173 7.5%
2005 9 45 20.0% 13 114 11.4% 22 159 13.8%
2006 1 48 2.1% 10 109 9.2% 11 157 7.0%
2007 5 76 6.6% 13 83 15.7% 18 159 11.3%
2008 0 6 0% 3 15 20.0% 3 21 14.3%
2009 2 14 14.3% 3 27 11.1% 5 41 12.2%
2010 2 33 6.1% 7 58 11.9% 9 91 9.9%
2011 5 36 13.9% 8 45 17.8% 13 81 16.0%
2012 6 40 15.0% 10 53 18.9% 16 93 17.2%
2013 5 45 11.6% 23 112 20.5% 28 157 17.8%
2014 3 51 5.7% 18 155 11.6% 21 206 10.2%
2015 14 38 36.8% 8 80 10.0% 22 118 18.6%
2016 5 21 23.8% 4 54 7.4% 9 75 12.0%
2017 13 30 43.3% 17 77 22.1% 30 107 28.0%
2018 13 39 33.3% 13 95 12.6% 26 134 19.4%
2019 13 36 36.1% 12 76 15.8% 25 112 22.3%
‘80-‘19 224 3,126 7.2% 521 5,484 9.5% 745 8,610 8.7%
 Figure 2: See Table 9 for details.

Percentage of IPOs with Negative EPS and Fraction of Tech Stocks, 1980-2019
90%

Percentage of IPOs with EPS<0

80%
Percentage of Tech Stocks

70%

60%

50%

40%

30%

20%

10%

0%