Hair removal, games beat Google in IPO

If you put money into Israel's answer to acne, or the world poker tournament, your friends with Google stock wouldn't be able to brag about their newfound wealth.

Search is a growing business, but hair removal appears to be a better investment.

Although investors and the public fixated on Google's initial public offering last year, investors who plunked down money on four relatively obscure IPOs from last year are actually doing better, in terms of year-to-year gains, according to statistics compiled by IPO Home.

Google went public at $85. It now sells for around $194, a 128 percent gain, a fairly staggering result.

Nonetheless, New River Pharmaceuticals, which develops medication for attention deficit disorder, went public at $7.50 and is selling at $26.98, a 237 percent gain. It's the current reigning champ in terms of return over a 12-month period for companies that went public in 2004.

China's Shanda Interactive, which makes online games, started at $11 and is selling for around $30, a 172 percent gain.

Atlas America, which concentrates on gas production in Appalachia, and Syneron, an Israeli outfit specializing in laser systems for the removal of hair and acne, are posting returns of 136 percent and 159 percent. Like Shanda and New River, the stocks went public at levels far below Google's $85 opening price.

Last week, WPT Enterprises, the outfit behind the World Poker Tour, was ahead of Google in terms of return, but it has slipped this week. WPT, which went public last August around the same time as Google, is selling for around $16.55, a 107 percent gain from the IPO price of $8.

Not everyone that went public in 2004 has experienced these results. Gravity, a maker of online games in Korea similar to Shanda, debuted at $11 earlier this year. It currently sells for $8.59.

Google, however, remains one of the fastest-growing companies ever. It hit the $1 billion revenue mark in five years, just slightly behind China's Semiconductor Manufacturing International Corp., or SMIC.

"They are the fastest companies to hit $1 billion," Peter Morris, general partner at New Enterprise Associates, said at the VentureOne Summit taking place in San Francisco this week.

SMIC, though, has not fared nearly as well in the public markets. It went public in March 2004 at $17.50. It went public the same day President Bush indicated the United States might pursue trade actions against China. Fears of a semiconductor slump soon followed. It trades at just under $10.

 

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