Companies That Had Their IPO in 2000: Last Days of the Dot Com Bubble

The first year of the new millennium brought with it a significant number of IPOs, much in part fueled by the ever-inflating dot com bubble. However, the IPO frenzy of the previous years would begin to slow down dramatically as the bubble began to burst in early spring.

• The beginning of the end: The dot com bubble reached its peak during 2000, but the good times were not to last.

• Stellar first-day returns: Companies, on average, had incredible first days of trading.

• The stark difference between Q1 and Q4: While the IPO market at the beginning of the year was incredibly strong, souring markets meant a sharp downturn in the number of companies going public.

• Internet and Technology: Internet and technology companies were in abundance during the IPO mania of 2000. Many internet companies failed to survive due to lacking commercial viability.

The year 2000 was the culmination of a broader market trend characterized by high investor optimism, especially in the technology sector. Many companies that IPO'd during this time were propelled by this euphoria, only to face the harsh realities of market corrections and the ensuing dot-com downturn, beginning early in the second quarter. The period as a whole was marked by extreme volatility, with many publicly traded companies experiencing rapid upturns in their stock prices followed by steep declines as the bubble began to burst.

The first quarter of 2000 was marked by euphoria and, in hindsight, wishful valuations. The first quarter of the year saw over 140 IPOs on the US markets, with a majority of these being technology companies with easy access to capital and favorable valuations. Perhaps the best indication of the market sentiment at the time was how companies were received by investors during the first day of trading. During Q1, over 20 companies saw their share price triple during the first day on the public markets, with nearly half of all companies going public during the quarter doubling their stock price on the first day of trading.

However, as the Nasdaq reached a new all-time high and valuations and the willingness to invest started to plummet shortly after, the latter half of the year saw a sharp decline in IPOs as most people started to realize that the dot com party was, unequivocally, over. During the fourth quarter of the year, the number of companies going public had declined by nearly 60% compared to Q1.

The largest IPO of the year, unsurprisingly, was a technology company. AT&T spun off its wireless service provider and took it public in April of 2000. At the time, it was the largest IPO ever in the United States. AT&T Wireless would eventually go on to be acquired by Cingular Wireless just a couple of years after its introduction to the NYSE.

Unlike many tech counterparts, the donut and coffee chain Krispy Kreme offered a tangible product with a loyal customer base. The company enjoyed initial post-IPO success but later faced challenges including overexpansion and financial irregularities. The company went private for a time but was reintroduced to the public markets in 2021.

Webvan was an online grocery delivery service that was one of the most hyped IPOs of 2000. Despite raising a significant amount of capital, Webvan couldn't sustain its business model and eventually went bankrupt.

The story of Gadzoox was in many ways emblematic of the realities of the dot com bubble. The company went public in the summer, with its share price soaring from around $20 to over $85 during the course of the trading day. At peak market capitalization, the company was worth close to $2 billion dollars. The company filed for bankruptcy in 2002, and its assets were bought by Broadcom.

Pets.com was an e-commerce company that focused on selling pet supplies to retail customers through the internet. It was founded in 1998 and went public just two years later, with a significant ownership stake from Amazon to boot. However, the company failed to execute on a viable business plan and eventually folded in the winter of 2000.

However, not all internet companies that IPO’d during 2000 crashed and burned in just a few years, something of which Rakuten Group is a prime example. The Rakuten of today is well established and managed to navigate the tricky market conditions following its IPO.

The GPS company Garmin had its IPO in December 2000 during a time when most technology companies would have thought twice about going public. Even though the market had soured considerably, it still performed exceptionally well on its first day of trading.

ON Semiconductors, also known as Onsemi, went public in May 2000. It is a semiconductor company, and just like Garmin, its technology came with specialized hardware and a solid business plan to boot.

The year 2000 saw both companies and investors riding out the last months of the dot com bubble before everything came crashing down. While the year started with a flurry of IPOs, sentiment soured during the latter half of the year, setting the stage for a much cooler IPO market during 2001.