Today in 1995, Netscape Communications Corp. went public.
Netscape was co-founded by Marc Andreessen who had earlier co-developed the Mosaic web browser at the University of Illinois in Urbana-Champaign. 4,250,000 of its shares were offered, becoming the third largest NASDAQ offering ever. Another 750,000 shares were offered internationally. The stock was initially valued at $14 a share, but at the last minute, the price of the initial offering was set at $28. The stock opened at $71, closing at $58 on the first day of trading. It was the best opening day for a stock in Wall Street history for an issue of this size.
The success of the offering inspired numerous startups, benefiting from the 1989 invention of the Web by Tim Berners-Lee and the hype about “the new economy” and “disruptive innovations,” to make their own IPO during a period that will come to be known as the dot-com bubble. The Netscape IPO is commonly regarded as the start of the bubble, ending on March 10, 2000.
A couple of weeks after the Netscape IPO, Bob Metcalfe wrote in InfoWorld:
In the Web's first generation, Tim Berners-Lee launched the Uniform Resource Locator (URL), Hypertext Transfer Protocol (HTTP), and HTML standards with prototype Unix-based servers and browsers. A few people noticed that the Web might be better than Gopher.
In the second generation, Marc Andreessen and Eric Bina developed NCSA Mosaic at the University of Illinois. Several million then suddenly noticed that the Web might be better than sex.
In the third generation, Andreessen and Bina left NCSA to found Netscape...