“The stock market is a device for transferring money from the impatient to the patient” -Warren Buffet.
How many times have you heard or read that famous quote? It isn’t just a coincidence that it keeps appearing on every new investor article you’ve read. While this quote is everywhere, it is not for lack of a better cause. There are many different strategies that investors can utilize to determine whether a stock is worth investing in. And it goes without question that staying invested over the long term historically pays off. That is why I have compiled a list of 5 stocks that would have made you a Millionaire if you purchased them at their IPO (Initial Public Offering) and held on to them until this day in 2018.
Everyone knows the Ecommerce behemoth Amazon. But back in 1997 it was a new face to the market. Originally working out of CEO Jeff Bezos’s garage, Amazon was an online book retailor selling its first book back in 1995. While Amazon has exponentially grown and adjusted from an online book store, one thing is certain- If you would have invested $18,000 (1,000 shares) and bought at Amazon’s IPO price of $18 back in 1997, you would have turned that $18,000 into $18 million dollars today.
Now we are going to talk about stock splits- which made this type of potential rewards possible for investors. Throughout Amazon’s history it has split its stock 3 times. The first time was a year after its IPO in 1998. This 2 for 1 split turned your 1,000 shares into 2,000. The next two splits took place in 1999 where the second split was a 3 for 1, which turned your 2,000 shares into 6,000 followed by another 2 for 1 split which turned your 6,000 into 12,000. With today’s closing bell Amazon’s stock price was up .92% ending the day at $1,537.64 per share. If you were still holding onto your 12,000 shares to this very day and sold, you would have walked away with $18,451,680. Don’t forget to pay your $7 trading fee though.
Amidst the 1990’s dot-com bubble, Priceline came to the public market on March 31st, 1999. Priceline, known for its website that can save you money on your flight, car rental, and hotel (also silly commercials featuring William Shatner) was a financial jackpot for those with the well-off knowledge to invest. A share back in 1999 would of cost you somewhere around $89 but it was not all up-hill from there. After the dot-com bubble burst, Priceline’s stock fell from well above $100 per share, to barely over $1 per share. In 2003 Priceline did a 1 for 6 reverse split (meaning if you owned 6 shares priced at $1 each, you now owned just 1 share priced at $6). While a lot of companies fail to recover from a reverse split, Priceline shares soared. If you were risky enough to invest just $3,500 into Priceline when it was at $1 a share, after the 2003 reverse split, you would have walked away with just over $1 million dollars today.
Founded in 1998 in Menlo Park, California, arose arguably the biggest search engine to date- Google. Google, founded by Larry Page and Sergey Brin, is a lot more than just a search engine though. From working on driverless cars to a human-powered monorail in New Zealand, Google has its hand in just about everything. When Google came to the public market in 2004, it offered 19,605,052 shares at a price of $85 a share. And if you were a high roller and invested $50,000 after Google’s IPO in 2014, you would have reaped the benefit of nearly $1.3 million if you sold today. Now you may be wondering if you’re doing the math along with me how, how investing $50,000 in google at $85 a share, and selling those 588 shares at $1,100.90 per share price equals nearly $1.3 million dollars. Well, like the other companies so far on this list, Google did a few stock splits. And if you still don’t believe me, “Google it”.
#4- NVR, Inc.
NVR, Inc is in the business of construction and sales of single-family homes, townhomes, and condominiums. It was in November of 1993 when founder Dwight Schar brought NVR, Inc to the American exchange. For around the price of $40 a share, you could own part of NVR, Inc back in 1993. Well that is not the case today. At the closing bell NVR, Inc hit $2,959.97 a share. With no stock splits in history if you would have bought 338 shares of NVR back in 1993, for roughly $13,520, and sold today you would officially be a millionaire walking away with $1,000,469 and some change.
Despite Netflix’s recent popularization ultimately causing the fall of video store chains like BlockBuster and Hollywood Video, it has been around for 21 years! Founded by Reed Hastings and Marc Randolph, Netflix was originally an online company that offered movie rentals. With the site going active in 1998 and Netflix offering a subscription service in 1999, it was only a matter of time before Netflix stole the market away from brick-and-mortar movie stores. Netflix came to the public market in 2002 offering a price of just $15 per share and since its initial public offering, has gone through 2 stock splits. So how much would you have needed to invest back in 2002 to be a millionaire just 16 years later? Well let’s say you invested in Netflix and bought 250 shares, an investment of $3,750. After the first stock split which was a 2 for 1 you would have had 500 shares. This was followed by a 7 for 1 stock split which turns your 500 shares into 3,500 shares. And you being the bold investor you are hold those shares until this very day in 2018 and sell it for the current stock price of $325.22 a share. Well congratulations, you made $1,138,270. Now go grab some popcorn, sit down in front of that 70 inch Ultra High Def TV you purchased with your new-found funds and throw on some Netflix and chill.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.