Public Company
In August 1999, the company became a public company via an initial public offering, offering 14.9 million shares at $12 per share. The company sold another 7.5 million shares to IBM, generating more than $200 million.[2] Dell Computer bought 1 million of the shares in the IPO. High-profile investors now included Amerindo Investment Advisors, the House of Saud, the Penske family, and David Bonderman. Safeguard Scientifics was the largest stakeholder.[3]
At the time of the IPO, ICG held stakes in 35 companies.[4] About half the businesses aimed to create either an online marketplace or online community, while the other half were engaged in software development.
The stock doubled in price on its first day, and hit $50 per share in October 1999.[2] Book value of the company, including stakes in VerticalNet and U.S. Interactive which had gone public, was only about $1 billion and Wall Street was betting on future success.[3]
By December 1999, the stock was trading at over $200 per share. Buckley's stake of 10 million shares, or 3.5% of the company and Fox's stake of 12 million shares, or 4.5% of the company, were each worth over $2 billion.[5] The company was valued at nearly $60 billion, making it the 3rd largest Internet company by market capitalization behind AOL and Yahoo!. By then, the company had invested $300 million in 39 start-ups and had a staff of 29 people to manage and advise those companies. Operations were split into two locations with Buckley serving as CEO and working out of the Philadelphia area, while Fox managed West Coast operations in San Francisco. Three executives were hired in November to head a new European team.[6]
In December 1999, the company raised over $1 billion in additional capital.[7][2] During its first 9 months as a corporation, it realized only $14.8 million of revenue and lost $6.4 million. In 1998, it recorded a profit of $14 million on $3 million of revenue, with the profits coming from sales of companies.[3]
By February 1, 2000, the stock had declined nearly $100 per share in anticipation of insider selling at the expiration of the lock-up period. However, retail investors bought up insider shares, stabilizing the price.[2] Meanwhile, the company continued to expand its investments. By early 2000, the company had invested $1.4 billion in 61 start-up firms, and was forging new partnerships with old economy leaders.[8] The rapid expansion was motivated by what Fox called "the biggest wealth-creation opportunity the world has ever seen" – finding the promising e-commerce B2B companies before anyone else.[6]
The NASDAQ Composite stock market index peaked in March 2000 and the company was hurt by the bursting of the dot-com bubble. By April 2000, its stock was down to $40 a share and GE Capital filed to sell nearly 1 million shares. By June 2000, the stock was down to $30 per share. Buckley, who sold very little of his own stock, remained optimistic.[2] By November 2000, the stock was down to $11 per share[9] and after the September 11 attacks it traded for 70 cents per share.[2] Two years after its peak in March 2000, the company had a market capitalization of $200 million, down 99.5%.[10]
The company survived the crash, and changed its business model. Instead of taking small stakes in many companies, it invested in a few "core" companies at a time, usually as majority owner. This allowed the company to have much greater control over the operations of its investments. Buckley refocused the company to find strategic partnerships with traditional industry leaders such as a joint venture with DuPont called CapSpan in early 2000.[8] ICG sold Logistics.com to Manhattan Associates[11] for $20 million in 2003.
