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Quote of the Day

“Imagine this, if you had invested $10,000 in Priceline on October 9, 2002, and held on through the 2008 decline, you’d have about $1.47 million today. On the other hand, if you had invested $10,000 in a seemingly safe bet, General Motors (GM), you would have exactly $0 today. Remember the saying “as GM goes — so goes America?” “

-Quote from a CBS news article covering Priceline’s stock in 2013. Priceline’s IPO occurred on this day in 1999 – one of the hottest IPOs in history.

March 30th – This Day in Stock Market History

March 30th, 1981 – Assassination attempt on Ronald Reagan. The NYSE would close early on the news (at 3:17pm)

After John F. Kennedy was assassinated on November 22, 1963, stock market trading reached some of the highest volumes seen in history. When news broke that Reagan had been shot, exchanges feared panic would ensue and decided to close down the exchanges. News of the assassination broke at 2:30, and the market closed 45 minutes later. Over those 45 minutes the Dow Jones Industrial Average only dropped about 8 points, a little less than 1%.

Stock markets would rise 1.18% when trading resumed the next day.

March 30th, 1999 – Priceline.com goes public in one of the hottest initial public offerings ever. Timed nearly perfectly with the tech bubble inflating, shares of Priceline were initially priced at $16, the shares opened for their first trade at $26.625, traded as high as $85 and closed the day at $69, a first-day return of 331% (for those lucky few who could get in at the offering price). After its IPO, Priceline has a market cap larger than that of United Airlines, Continental Airlines and Northwest Airlines combined!

Here is how the New York Times covered Priceline’s IPO:

Exactly a month later, the stock had rose significantly – reaching $162. As the tech bubble burst a year-and-a-half later, Priceline would trade at less than $5 per share.

Of course Priceline was one of the few internet companies that actually had some kind of revenue. The company held on, nearly dormant for 6 years, before launching higher once again. Today, Priceline is one of the few internet stocks where long term investors would actually see a full recovery in their share price from tech bubble peaks. Today, Priceline (now known as Booking Holdings, and trading under the ticker: BKNG) is worth $100 billion.

(The prices appear different in the chart below compared to the paragraph above because of a 1 for 6 reverse stock split in 2003)

priceline_stock_chart2018

Best March 30th in Dow Jones Industrial Average History

1898 – Up 3.73%, 1.22 points.

Worst March 30th in Dow Jones Industrial Average History

2009 – Down 3.27%, 254.16 points.

Read of the Day

We take a look at a few other notorious tech bubble companies, and try to evaluate why some companies survive and thrive (like Priceline), with others fail spectacularly (like pets-dot-com). See our post here:

Lessons from the Pets.com Downfall – What’s the Difference Between a Bad Idea and a Good Idea That’s Early?

<– Go To Previous Day: March 29th: 1999 – The Dow closes above 10,000 for the first time.

Go To Next Day: March 31st, 1917 – The United States purchases the Virgin Islands, from Denmark for $25 million in gold. –>