Unlike expectations, 2020 was a strong year for IPOs (initial public offerings). We witnessed some massive IPOs, such as Airbnb, DoorDash, and others, that helped investors make tons of money. However, like every year, not all IPOs enjoyed the backing of investors, and thus, they failed to make a mark. In this article, we will be discussing the ten worst IPOs of 2020.
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Ten Worst IPOs Of 2020
For our list of the ten worst IPOs of 2020, we have taken stocks that are trading below their IPO price, or only recently breached their IPO price. The list is in no particular order. Following are the ten worst IPOs of 2020:
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Galecto
Galecto, a phase 2 biotech developing therapeutics for fibrosis and related diseases, went public in October last year. The company priced its IPO at $15, which is the midpoint of its range of $14 to $16, and raised $85 million by offering 5.7 million shares. Galecto’s stock is currently trading over $7, and is down over 40% YTD.
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Virios Therapeutics
Founded in 2012, this biotechnology company went public in late December. Virios Therapeutics offered 3 million shares of its common stock at an offering price of $10. The shares of the company are currently trading over $5 and are down almost 28% YTD. Virios Therapeutics, headquartered in Alpharetta, GA, focuses on developing novel antiviral therapies.
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GBS
GBS, a saliva-based glucose device developer, went public in late December. The company offered 1.3 million shares at $17, raising about $22 million. GBS priced the IPO at the mid-point of its range of $16 to $18. Its shares are currently trading close to $7, and are down almost 9% YTD.
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Inhibikase Therapeutics
Inhibikase Therapeutics, which is an early stage biotech company developing kinase inhibitors for Parkinson's and related disorders, went for IPO in the last week of December. The company raised $18 million by offering 1.8 million shares at $10. Initially, Inhibikase planned to price its IPO in the range of $10 to $12. Currently, the stock is trading close to $6, and is down over 13% YTD.
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Medirom Healthcare
Medirom Healthcare, a Japanese operator of relaxation salons developing a digital health service, went public in the last week of December. The company priced its IPO at a price of $15.00/ADS with each ADS representing one common share. Initially, the Japanese company planned to price its stock at a range of $14-$16 per ADS. Presently, the shares are trading over $10, and are down almost 26% YTD.
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ContextLogic
ContextLogic, the parent company of eCommerce platform Wish, went public in December last year. On its debut, the stock dropped by about 16%, after opening at $22.75 per share, well below its IPO pricing of $24 per share. The company estimated the price range of its shares at $22 to $24. WISH’s stock is currently trading at over $17, and YTD, the stock is down more than 1%.
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McAfee
McAfee went public again in October last year. The cybersecurity software firm started trading at $18.60, below its $20 IPO price. Presently, the stock is trading at over $23. McAfee started trading above its IPO price only from last month. The company is currently working on selling its enterprise-software business to a consortium, which is headed by private-equity firm Symphony Technology Group. YTD, the stock is up more than 40%.
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Root Inc.
Founded in 2015, it is an automobile insurance startup that went public in October last year. Root priced its IPO at $27, above its target range of $22-$25 per share. Currently, its shares are trading at over $11.75. Tiger Global Management is one of the investors in Root. In the fourth quarter, revenue for the company dropped by more than 50% to $50.9 million from the year-ago quarter.
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GoHealth
GoHealth runs a marketplace for Medicare plans. It is among the very few companies whose stock price closed below the IPO price on the first trading day. Presently, GOCO trades over $11, compared to its IPO price of $21. It went public in July last year, and priced its shares above its anticipated IPO range of $18 to $20 range. YTD, the stock is down almost 15%.
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Casper Sleep
CSPR’s IPO didn’t have a good start. The company had to reduce its price range from the initial $17 to $19 price range to $12 to $13. Though the stock gained about 13% on its first trading day, it soon lost momentum after the pandemic gripped the financial markets worldwide. CSPR is currently trading over $8.23. It started trading on the NYSE in February last year, and opened at $14.50 following its initial public offering.
