In this article we discuss the 5 IPOs that flopped. If you want to read our detailed analysis of these IPOs, go directly to the 10 IPOs that Flopped.
5. ContextLogic Inc. (NASDAQ:WISH)
Number of Hedge Fund Holders: 21
Share Price on September 21: $6.07
IPO Price: $24 per share
ContextLogic Inc. (NASDAQ:WISH) is ranked fifth on our list of 10 IPOs that flopped. The firm owns and operates a mobile ecommerce platform and is headquartered in California. In late 2020, the company debuted on the stock market and raised more than $1 billion with a $24 per share price. However, in the following two days, the share price dropped drastically, sinking almost 16% and hovering around $19 at one point, before rebounding slightly. The shares plunged in value further over the past few months.
On August 23, investment advisory Citi maintained a Neutral rating on ContextLogic Inc. (NASDAQ:WISH) stock but lowered the price target to $7.50 from $12, noting that the firm was having difficulty sustaining growth due to higher user churn and elevated ad rates.
Out of the hedge funds being tracked by Insider Monkey, New York-based firm JS Capital is a leading shareholder in ContextLogic Inc. (NASDAQ:WISH) with 1.8 million shares worth more than $24 million.
4. Sogou Inc. (NYSE:SOGO)
Number of Hedge Fund Holders: 19
Share Price on September 21: $8.90
IPO Price: $13 per share
Sogou Inc. (NYSE:SOGO) is a China-based firm that markets internet search and related services. It is placed fourth on our list of 10 IPOs that flopped. In 2017, the firm debuted on the stock priced at $13 per share, raising more than $585 million at the IPO. However, in the following months, the stock slumped in value and did not reach the IPO price again until June 2018. The shares are still trading below the IPO price.
In earnings results for the second quarter, posted on August 9, Sogou Inc. (NYSE:SOGO) reported earnings per share of $0.11 and a revenue of $147 million, down more than 43% from the revenue over the same period last year,
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Sogou Inc. (NYSE:SOGO) with 2.9 million shares worth more than $25 million.
3. Lucira Health, Inc. (NASDAQ:LHDX)
Number of Hedge Fund Holders: 6
Share Price on September 21: $7.31
IPO Price: $17 per share
Lucira Health, Inc. (NASDAQ:LHDX) is a California-based firm medical technology company that makes and sells infectious diseases test kits. It is ranked third on our list of 10 IPOs that flopped. In early 2021, the firm went public, raising $153 million through an offering priced at $17 per share, above a proposed price of $16 per share. The stock has fallen more than 50% in value since the IPO.
In May, investment advisory William Blair downgraded Lucira Health, Inc. (NASDAQ:LHDX) stock to Market Perform from Outperform without a price target. Brian Weinstein, an analyst at the advisory, issued the ratings update.
At the end of the second quarter of 2021, 6 hedge funds in the database of Insider Monkey held stakes worth $6 million in Lucira Health, Inc. (NASDAQ:LHDX), down from 8 in the preceding quarter worth $12 million.
2. Zynga Inc. (NASDAQ: ZNGA)
Number of Hedge Fund Holders: 49
Share Price on September 21: $7.64
IPO Price: $10 per share
Zynga Inc. (NASDAQ:ZNGA) is a game developer that concentrates on marketing of social game services. It is ranked second on our list of 10 IPOs that flopped. The company went public in 2011 and priced the IPO at the top end of a proposed range of $8-$10. It was the biggest IPO since Google in 2004 and raised $1 billion for the firm. However, immediately after the IPO, the share price plunged, incrementally falling and has not recovered since. It is still trading below the IPO price.
On May 6, investment advisory Bank of America upgraded Zynga Inc. (NASDAQ:ZNGA) stock to Buy from Neutral with a price target of $13.5. The shares of the social gaming company soared by 6% after the ratings update.
At the end of the second quarter of 2021, 49 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Zynga Inc. (NASDAQ:ZNGA), up from 47 in the previous quarter worth $1.1 billion.
In its Q4 2020 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Zynga Inc. (NASDAQ: ZNGA) was one of them. Here is what the fund said:
“We also added to our position in Zynga. Our multiyear investment campaign in Zynga has been based on a new management team’s ability to drive steady growth in the company’s base portfolio of games, expand margins, reinvigorate the new game development pipeline and use its strong balance sheet to acquire complementary games and studios. Shares have been pressured in recent quarters, presumably because of investor concerns about the company’s moderating growth rate and Apple’s pending new privacy policy which will make it more difficult for Zynga to both efficiently acquire new players and sell advertising in its games. We believe the company has multiple growth levers it can pull in the periods ahead, including the rollout of new games, acquisitions, further penetration into international markets and entry into new gaming categories, to name a few. Furthermore, our research suggests the Apple privacy policy change is manageable for larger mobile game developers such as Zynga. Given our strong conviction in the profit cycle, we used recent weakness to add to our position.”
1. GoHealth, Inc. (NASDAQ:GOCO)
Number of Hedge Fund Holders: 14
Share Price on September 21: $5.35
IPO Price: $21 per share
GoHealth, Inc. (NASDAQ:GOCO) is ranked first on our list of 10 IPOs that flopped. The firm owns and operates a digital health insurance marketplace and is headquartered in Chicago. The firm raised $914 million in an IPO priced at $21 per share, one of the priciest health IPOs in history. However, the shares have fallen rapidly in value since, and are presently trading at close to 75% below the IPO price.
On August 12, investment advisory Raymond James downgraded GoHealth, Inc. (NASDAQ:GOCO) stock to Market Perform from Outperform, underlining that the firm had missed market estimates on earnings in the results for the quarter ended June 2021.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Centerbridge Partners is a leading shareholder in GoHealth, Inc. (NASDAQ:GOCO) with 40 million shares worth more than $456 million.
You can also take a peek at Billionaire Stan Druckenmiller’s Top 10 Stock Picks and Billionaire Julian Robertson On Interest Rates and His Top Stock Picks For 2021.
