10 IPOs that flopped
Lantronix, which makes electronic monitoring devices for vending machines and other equipment, went public in August 2000. But the offering was in trouble even before the launch. First off, Lantronix scaled back its offer from 9 million shares to 6 million. It also dropped the offering price from $15 to $10. Rumors say the prospectus had balloons tied to it and 'Priced to Move' stamped on the cover page.
A bad start indeed. And things got worse. On the first day of trading, the stock price tumbled 20%. Later, Lantronix was acquired by DLJ, who reportedly recommended the company stock to its clients on the same day of the acquisition. The stock subsequently plunged to seventy cents a share. Securities regulators eventually investigated the impromptu recommendation of the battered stock.