Ever since the credit crunch and Great Recession KO'ed the IPO market, it has been difficult for companies to raise money and go public. Perhaps the successful (and over-subscribed) IPO of General Motors (NYSE:GM) can mark the turn in the tide. Then again, a successful IPO is no guarantee of a long run as a successful company or stock; the IPO frenzy of the 1990s, for instance, created a great deal of excitement and small fortunes for nimble traders, but also left a lot of wreckage. (To learn more, see our IPO Basics Tutorial.)
Nobody knows whether General Motors will fare better on its second trip around the track. In the meantime, here is a look at some memorable IPOs that failed, flopped or otherwise flamed out.
CIT Group - The Biggest of the Bunch
CIT Group (NYSE:CIT) has a history stretching back to 1908 and has boasted of having done business with about 80% of the Fortune 1000. That did not prevent the company from running itself into trouble in late 1999, and management had to scramble to find emergency credit facilities. Eventually the company sold itself to Tyco in 2001, and Tyco then spun the company out in an IPO in July that raised $4.6 billion 2002. The credit crisis walloped the company, though, and the company ultimately needed over $2 billion in TARP bailout money - a bailout that ultimately went for naught as the company declared bankruptcy in November of 2009. All that said, the company is still here; CIT emerged quickly from pre-packaged bankruptcy and trades on the NYSE once again with over $8 billion in market cap. However, bad memories for those who held the stock into the bankruptcy persist.
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