Others in the I.P.O. Hall of Shame

Vonage eventually had to settle a class-action lawsuit over its I.P.O.Jae C. Hong/Associated PressVonage eventually had to settle a class-action lawsuit over its I.P.O.

After the horrible, ruinous Murphy’s Law-abiding fiasco that was the initial public stock offering of BATS Global Markets, many are wondering if the company’s glitch-filled offering was the biggest I.P.O. botch in history.

BATS, an electronic exchange based in Kansas, has steep competition. Public offerings are supposed to go smoothly, with underwriters, issuers and regulators all working in perfect harmony to start a new stock to glowing acclaim. But often, as with BATS, the process runs into trouble. Here are a few of the greatest I.P.O. disasters of recent decades:

Vonage

The 2006 public offering of Vonage, the Internet calling service, was supposed to be a home run. The company priced its shares at a healthy $17, raising $531 million in new capital.

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But paradoxically, the company made a mistake in trying to do good. In an unusual step, Vonage set up a Web site where customers could buy shares in the offering. But a technical glitch (sound familiar?) kept many customers from buying the stock immediately. A few days later, when customers finally learned whether or not they had been allocated shares in the initial offering, Vonage’s stock price had fallen considerably. But customers who had been given stock still owed $17 a share. Angry shareholders revolted, filing a class-action lawsuit against the company. Regulators also fined Vonage’s underwriters over improper communication during the I.P.O. blunder.

Today, Vonage’s stock trades around $2.22 a share.

Wilt Chamberlain Restaurants

Wilt Chamberlain, the Hall of Fame basketball player nicknamed “The Big Dipper,” had a host of problems with the 1993 I.P.O. of his Florida restaurant. The deal was run by a now-defunct brokerage house, Meyers Pollock Robbins, which was later reported to have mob ties. The stock price crumbled upon opening, with shares losing a third of their value, and the offering was canceled several days later. The restaurant never went public, despite having what Reuters called a “small glass-walled basketball court” inside.

Eagle Computer

The 1983 offering of Eagle Computer was pulled not because of incompetence but because tragedy befell the firm. The company’s chief executive, Dennis Barnhart, was killed in an automobile accident on the company’s first day of trading, when his “red Ferrari veered out of control a block from company headquarters in Los Gatos,” according to an article in The New York Times about the accident. Eagle Computer took the company public again a few months later, but it eventually succumbed to rivals, going out of business in 1986.

Normandy America

Normandy America, a reinsurance company based in Omaha, pulled its offering in 1995, a day after it began trading, and rescinded all trades, citing “adverse conditions in the public market.” What that meant, loosely, is that investors decided that the offering, which was priced at $25 a share but immediately dipped after trading began, was mispriced. (“Sounds like a price bogey,” one syndicate manager told Canada’s Globe and Mail at the time.)

The company happened to go public in the same month as Netscape, the Internet giant whose wildly successful I.P.O. is widely considered to have set off the dot-com boom.

A Kozmo.com messenger.Chester Higgins Jr./The New York Times A Kozmo.com messenger. The company was one of the casualties of the dot-com bust.

Kozmo.com

Kozmo.com, an ill-conceived company whose orange-jacketed runners delivered movie rentals and snacks on a squadron of scooters, was a cartoonish archetype of the frothy I.P.O. climate of the late 1990s, when any two-bit tech company could fling itself at the public markets. Kozmo, which once employed about 3,000 people, was forced to withdraw its offering in August 2000, citing “unfavorable market conditions” (those again!) and laying off 40 workers in an announcement the same day.

Like many of its contemporaries, Kozmo.com failed when the tech bubble popped in 2001.

Now, BATS, do you feel any better?