By SIMON CONSTABLE
Just as the dot-com bubble began to burst in the second quarter of 2000, megasize phone company decided to shed its cellphone service known as AT&T Wireless Group. The ensuing sale became the then largest initial public offering on record, raising $10.6 billion.
Despite the epic amount of cash raised, AT&T Wireless’s first-day jump was just 7.4%. Wall Street expectations were for an “unspectacular price performance,” according to The Wall Street Journal. But many individuals had become conditioned to expect a huge first-day rally in the share price, says Art Hogan, chief market strategist at B Riley Wealth Management.
That was likely disappointing for some who bet big on a first-day price surge. The Journal featured one AT&T employee’s borrowing $54,400 on the IPO, an amount far greater than his annual salary. “That was very much the investing mindset which had yet to burst,” Hogan says. But as became apparent shortly thereafter, that attitude evaporated as the tech-heavy Nasdaq index slumped until October 2022.
As often happens on Wall Street, the glow was barely off the giant IPO, when AT&T Wireless was sold to Cingular Wireless. Read more here.
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