The Hottest IPOs of 2013

24/7 Wall St.

On Thursday, Twitter finally revealed key information about itself and its initial public offering (IPO). While investors no doubt are excited about the company's compelling growth and its plans for the future, it has yet to book a profit. Still, the microblogging service -- to start trading under the symbol TWTR -- is arguably the most anticipated IPO since Facebook.

It is an especially good time to go public. Since the beginning of the year, a number of IPOs more than doubled in price the day they went public. 24/7 Wall St. reviewed the IPOs that went public this year to identify the companies with stocks that had the largest first day percentage increase over the offering price.

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Click here to see which companies had a great first day going public

One reason there are so many IPOs doing well on their first day of trading is that the stock market has been on a tear. The S&P 500 is up 18.4% on the year. Many small-cap indexes have risen by an even greater amount.

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In some years, hot IPO issues are dominated by one sector. In the early 2000s, technology and biotech did well. This year, technology and biotech companies, as well as a variety of other industries, from restaurant chains to business services, are among the most the successful.

It is not uncommon for growth companies to be unprofitable when they go public. In fact, all but three of the 14 companies with the largest first day jumps were unprofitable in their most recent two quarters.

Despite the lack of profitability, many of these companies have managed to maintain considerable investor attention. Most of the companies with the hottest IPOs have posted gains since their first day as a public company. As of Friday, eight of the 14 companies are up at least 10% from the first day’s closing.

To determine the hottest IPOs of 2013, 24/7 Wall St. identified the IPOs with the biggest jump in stock price over the offering price on their first day of trading. While many IPOs can improve performance after their first day of trading, to be considered a “hot IPO” shares needed to rise by at least 50% from the offering price by the close on the first day. Offering prices for new issues come from Renaissance Capital. All other share price information is from Google Finance. Revenue and net profit or loss figures come from company filings with U.S. Securities and Exchange Commission. Current prices listed are as of the close October 4, 2013.

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These are the hottest IPOs of 2013.

14. Epizyme
> First day increase: 53%
> Market cap: $1.12 billion
> Past two quarters revenue: $23.7 million
> Past two quarters income: -$10.0 million

Epizyme Inc. (EPZM) is a clinical-stage biotech outfit targeting patients with genetically defined cancers. Since its public offering, the stock has done very well. Shares went public on May 31, with the IPO priced at $15 per share. The stock's first trade was at $20.00, and shares continued to rise and ended up closing at $22.99, a 53.2% increase from the IPO price. Shares kept rising thereafter to a recent high of more than $45, before settling back down to just under $40 as of Friday’s close.

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13. Intrexon
> First day increase: 54.6%
> Market cap: $2.21 billion
> Past two quarters revenue: $10.8 million
> Past two quarters income: -$43.2 million

Intrexon Corp. (XON) has Exxon's old stock ticker, and it could end up being one of the great companies of the future on its own merit. Intrexon uses synthetic biology to collaborate with companies in health, food, energy and the environment to create biologically based products. Initially, Intrexon intended to offer just 8.3 million shares. However, the offer size eventually was increased to 10 million shares and priced at $16 apiece -- the peak of the expected range. In its first day, August 8, shares closed up more than 54% over the offering price, at $24.73. Shares then proceeded to trade up briefly over $30 in the two days after the IPO. However, shares are now back down to less than $25.

12. Cvent
> First day increase: 56.8%
> Market cap: $1.39 billion
> Past two quarters revenue: $51.3 million
> Past two quarters income: -$2.0 million

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Cvent Inc. (CVT) has benefited from the success of its event planning platform, which helps exhibitors and event hosts alike. Its August 9 IPO was priced at $21.00 a share, and shares opened at $38.00 on their first day of trading. The stock closed down at $32.92 on the first day, but this still amounted to a gain of 56.8% over the offering price. Shares have traded with high levels of volatility since August, rising to a high above $46 on September 16. On Friday, shares closed at $34.70.

11. bluebird bio
> First day increase: 58.2%
> Market cap: $590.2 million
> Past two quarters revenue: $7.5 million
> Past two quarters income: -$11.1 million

bluebird bio Inc. (BLUE) is a clinical-stage company targeting new gene therapies for severe genetic and rare diseases. It priced its IPO at $17.00 per share for trading on June 19, and shares opened higher at $25.50. Shares continued to rise and closed up 58.3% over the offering price at $26.91 on that first day. Shares soared to more than $36 at one point, but the stock has tumbled back to barely higher than its first-day opening price. Shares closed out Friday at $25.96.
10. Xoom
> First day increase: 59.9%
> Market cap: $1.08 billion
> Past two quarters revenue: $57.8 million
> Past two quarters income: +$4.0 million

Online international money transfer service provider Xoom Corp. (XOOM) went public on February 15. The $16 offering price was already above its projected range, and shares opened up even stronger, at $21. Following its strong start, the stock price closed higher at $25.49, for a gain of 59.9% over the offering price on its first day. Shares have since traded as high as $36 and the stock closed last week at $32.57.

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9. Tableau Software
> First day increase: 63.7%
> Market cap: $4.17 billion
> Past two quarters revenue: $89.9 million
> Past two quarters income: -$6.6 million

Tableau Software Inc. (DATA) is in the rapidly changing and growing field of software-based business and data analytics. It priced its initial offering at $31. On May 17, its first day of trading, shares gapped up to $47 at the open and ended the day up a sharp 63.7% over the offering price, at $50.75. Shares continued to rise thereafter, with the stock rising above $70. It closed on Friday at $70.41.

8. Marketo
> First day increase: 77.6%
> Market cap: $1.17 billion
> Past two quarters revenue: $42.2 million
> Past two quarters income: -$21.9 million

Marketo Inc.'s (MKTO) market debut was on May 17, with its IPO priced at $13 per share. Marketo opened at $20 a share and closed even higher, at $23.10, for a first-day gain over the offering price of 77.6%. Shares for this cloud-based marketing software platform operator have continued to rise, peaking at above $39 and closing on Friday at just under $32.

7. FireEye
> First day increase: 80.0%
> Market cap: $4.69 billion
> Past two quarters revenue: $61.6 million
> Past two quarters income: -$67.2 million

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FireEye Inc. (FEYE) is in the booming real-time virtual security sector. Volatility was high on FireEye's debut day. It was priced at $20.00 a share for a September 20 IPO date. Shares opened at $40.30 and hit a high of $44.89 intraday before closing 80% above the offering price, at $36.00. FireEye’s stock may not have recaptured those highs, but shares have recently moved back above $40.

6. Rocket Fuel
> First day increase: 93.4%
> Market cap: $2.03 billion
> Last two quarters revenue: $92.6 million
> Last two quarters income: -$11.9 million

Rocket Fuel Inc. (FUEL) offers an ad platform that uses artificial intelligence to help advertisers market their products to consumers more effectively. Its stock has soared since its debut. The IPO was priced at $29.00 per share on September 20, its first day of trading. Shares closed up more than 93% over the offering price, at $56.10. Since then, shares have traded as high as $68 and closed on Friday at $62.52.

5. Foundation Medicine
> First day increase: 96.3%
> Market cap: $908.4 million
> Past two quarters revenue: $11.1 million
> Past two quarters income: -$17.5 million

Unlike many other biotechs, Foundation Medicine Inc. (FMI) already is generating revenues. Its platform analyzes tumor tissue samples for various cancers to better focus treatment. Foundation Medicine’s IPO was priced at $18.00 per share for its trading debut on September 25. Shares closed up more than 96% over the offering price on the first day, at $35.35. The company’ shares climbed as high as $40, but as of Friday’s close, shares changed hands for less than $34.

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4. Benefitfocus
> First day increase: 102%
> Market cap: $1.09 Billion
> Past two quarters revenue: $48.2 million
> Past two quarters income: -$15.2 million

Benefitfocus Inc. (BNFT) priced at $26.50 a share for its trading debut on September 18 and closed up on its first day roughly 102% above its offering price, at $53.55. Trading volume has since fallen, and the stock is down to less than $45 in recent trading. Benefitfocus offers a cloud-based insurance benefits management platform that serves consumers, employers and insurance carriers.

3. Noodles & Company
> First day increase: 104%
> Market cap: $1.28 billion
> Last two quarters revenue: $170.5 million
> Last two quarters income: +$992,000

Noodles & Co. (NDLS) is one of the biggest restaurant IPOs in recent years. It went public on June 28 at $18 per share, but shares opened at $32 and ended up closing even higher for a total 104% first-day gain over its offering price. Shares continued to climb in their first week of trading to more than $50. Since then, shares have declined to settle at about $43 in recent trading.

2. Potbelly
> First day increase: 119%
> Market cap: $861.8 million
> Past two quarters revenue: $146.9 million
> Past two quarters income: -$7.5 million

Popular sandwich chain Potbelly Corp. (PBPB) went public on Friday, October 4, and finished the day 120% above its offering price. Demand from investors was high even before the IPO. Potbelly’s underwriters initially planned to offer 7.5 million shares for between $9 and $11, but the offering price on all 7.5 million shares eventually was raised to $14. As of the first half of 2013, Potbelly posted an operating profit of $4.9 million. However, the bottom line for shareholders still amounted to a $7.5 million loss.

1. Sprouts Farmers Market
> First day increase: 122.8%
> Market Cap: $7.05 Billion
> Past two quarters revenue: $1.2 billion
> Past two quarters income: +$30.6 million

Sprouts Farmers Market Inc. (SFM) has enjoyed the organic and natural foods craze. Its August 1 IPO was priced at $18 per share, and it only got better from there. Shares opened at $35 and closed up at $40.11 for a first day gain over the offering price of nearly 123%. Shares are even higher now with the stock closing Friday above $48.

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