I’ve been looking at IPOs recently to see how you would have fared if you had invested in them.
One of the most successful has been the CSL Limited (ASX: CSL). As I revealed here, a $10,000 investment in the biotherapeutics company’s IPO would have left you very wealthy.
A more recent IPO was undertaken by ecommerce company Kogan.com Ltd (ASX: KGN). Let’s have a look and see how successful investing in this would have been.
The Kogan IPO.
Kogan listed on the Australian share market just under four years ago on 30 June 2016. The company’s shares were listed at $1.80 per share, giving it a market capitalisation of $168 million.
This means that if you invested $10,000 into its IPO, you would have ended up with approximately 5,556 shares.
At that point Kogan was generating sales of $200 million and was targeting an increase to $240 million in FY 2017. Fast-forward to today and Kogan is now generating more than both these in just one half. In the first half of FY 2020 the company delivered gross sales of $322.9 million.
And given its strong performance in the third quarter and in April, it looks set to smash records and deliver bumper sales growth this year.
Kogan share price hits a record high.
Unsurprisingly, this strong performance has been reflected in its share price. Earlier today’s Kogan’s shares stormed to a record high of $9.56.
When its shares hit that level, it meant they had gained an impressive 431% since their IPO in June 2016.
This means those 5,556 shares you would have picked up at the IPO would have a market value of ~$53,515. I think that’s an excellent return in such a short space of time.
And let’s not forget that the Kogan story is only really starting. Given the rise of online shopping and the growing popularity of its offering, I suspect there could be more strong returns to come over the next decade.
In light of this, I wouldn’t be cashing in my shares any time soon if I invested in the IPO.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post If you invested $10,000 in the Kogan IPO, this is how much you’d have now appeared first on Motley Fool Australia.
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