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Quote of the Day
“Early on, we realized that until you actually sell the stock, it doesn’t exist”
-VA Linux employee Chris DiBona, whose company IPO’d on this day in 1999. VA Linux stock rose 700% on its first day of trading, the best performing IPO in history. One year later, shares were down from over $300 to $8.
December 9th – This Day in Stock Market History
1941 – Stock trade for the second day after the Pearl Harbor attack. After falling 3.5% the day prior (December 8th, 1941), the Dow Jones Industrial Average falls an additional 2.90%.
1999 – VA Linux System IPOs. The stock begins with $30 offering price, shares jumped to $299 on first print. Shares would peak at $320, and close at $239.25, a 698% rise, the biggest IPO “pop” in history.
The founder, then 38 year old Larry Augustine, would become a billionaire overnight. Many of VA Linux employees would become millionaires on paper, but they were required to hold shares for at least 6 months. By the time they could sell, shares of VA linux were below $40.
Of course, like most technology companies that IPOed late 1999, the fun would not last. It was just 4 months before the Nasdaq index would hit its peak, but many stocks were already rolling over.
One year after its IPO, VA Linux Systems shares traded at $8.49.
After years of selling off portions of the business, and changing it’s name several times, the final piece of the company (known as Geeknet, inc. at the time) was sold to Gamestop in June 2015 for $20 per share.
Source: Panic, Prosperity, and Progress: Five Centuries of History and the Markets
Best December 9th in Dow Jones Industrial Average History
1946 – Up 2.78%, 4.75 points.
Worst December 9th in Dow Jones Industrial Average History
1941 – Down 2.90%, 47.08 points.
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