More Companies are Going Public Than Ever Before
With the conditions on Wall Street seemingly irresistible for companies looking to raise capital through public offerings, I’ve got my eye on one stock in particular.
Despite being a year in which a global pandemic caused an array of difficulties for nearly every type of company and the investors that trade them, 2020 was one of the best years on record for businesses making an entry into the stock market through an initial public offering (IPO).
For the year, IPOs more than doubled from the 242 we saw in 2019, as 494 companies qualified to become publicly traded in 2020.
In total, $168 billion was raised by the new share offerings in 2020.
That figure looks very impressive, until you compare it to what’s been happening so far this year.
As of June 2021, IPOs had already raised a staggering $171 billion.
It should come as no surprise that companies that are going public these days are able to raise incredible amounts of money. The stock market is riding high on the back of the Federal Reserve’s low interest rates and a wave of retail investors armed with stimulus checks.
The lofty valuations that companies are able to achieve by going public in these market conditions make it perhaps one of the best times ever to raise capital – are encouraging even more IPOs as a result.
Analysts estimate that the total amount raised by IPOs could reach as much as $300 billion by the end of the year.
It’s clear to see that IPOs could be one of the biggest profit opportunities for the remainder of 2021 and beyond.
Where’s the money?
There’s been a ton of hype surrounding the IPOs and direct listings of some very popular names already this year, including Krispy Kreme, Inc. (DNUT), website maker Squarespace, Inc. (SQSP), and the first ever publicly traded crypto exchange Coinbase Global, Inc. (COIN) – just to name a few.
These debuts have accounted for some of the largest, fastest price movements in the market so far this year. And we should be in for a lot more action in the rest of 2021…
Instacart – a grocery delivery service – is one of the most anticipated IPOs of the year, and was in the news yesterday for hiring Facebook executive Fidji Simo as its new CEO ahead of its expected IPO.
After watching DoorDash, Inc. (DASH) raise$3.7 billion with its IPO and boost its $32 billion valuation $70 billion on its first day of trading, investors are eagerly awaiting more news on when Instacart plans to go public.
One of the most valuable companies that could make a stock offering this year is Stripe – a payments processing software company that achieved a $95 billion valuation in March. That figure is almost triple the $36 billion estimate from less than one year prior, showing that Stripe is on the rise in a big way.
While Stripe has yet to share any official plans of going public, it is widely speculated that the company will do so within the next year or two.
Look, with so many more companies potentially hitting the open market in the near future, I could go on and on about the names you should be on the lookout for.
But there’s one company that just recently made their initial public offering, and is setting up nicely for my preferred method of trading around IPOs.
Take a look…
How do I get some?
For as many IPOs that hit the market and rocket up, just as many aren’t able to build on their momentum heading into their debut.
The hype and excitement surrounding a company’s IPO can be both a blessing and a curse for traders. New stocks that take off right after they’re offered to traders can sometimes have a hard time maintaining the initial buying volume and fall back to Earth.
But if a company you’re interested in investing in doesn’t skyrocket right out of the gate, don’t despair.
I actually like trading IPOs that go down at first, because a lot of time they will bounce back. Timing your entry well is crucial to your success, but often times you can grab discounted shares before they rebound.
And last week’s IPO of The Beachbody Company, Inc. (BODY) – which operates a platform for digital-streaming of fitness exercise, nutrition, and peer support – is offering just such an opportunity.
After spiking as high as $13.50 on its first day of trading, shares of BODY can now be had for more than 36% less.
I think the fitness industry is on the cusp of another boom, and this might be your best buying opportunity to get a great price on this up and coming company.
But this strategy isn’t the only lucrative way to trade IPOs…
Pre-IPO rights are “the best-kept secret of the investing world”
A well-known investment reporter recently stated that a new investment vehicle should “be on radar screens everywhere, but are terra incognita to most investors.”
A veteran economic analyst calls them “the best kept secret of the investment world.”
Pre-IPO rights have produced exceptional peak gains of 2,088%, 6,566%, even 9,075% in months.
Yet Wall Street and the financial media have sewn their mouths shut.
It’s time you knew the truth. Click here to see more.
In the Spotlight: A new front in the war on big tech
Amid a bevvy of antitrust investigations, the U.S.’s biggest tech companies surely breathed a sigh of relief when a federal judge threw out a lawsuit against Facebook, Inc. (FB) recently.
But Wednesday’s news gave us a big indication that the fight against antitrust practices of big tech firms is far from over.
Reports surfaced earlier this week that Alphabet Inc. (GOOGL) has yet another legal fight on its hands.
District attorneys in 37 states and the District of Columbia have opened a new lawsuit against Google for what it claims to be antitrust violations from its Play Store.
The suit claims that Google’s control over the marketplace and which apps are allowed to be listed breaks antitrust laws.
While it’s still to early to speculate the outcome of this and other lawsuits Google is embroiled in, the latest news is not doing any favors for shareholders as GOOGL stock dropped more than $2.5 from Wednesday’s high.
As more news breaks on this and other developments in the big tech antitrust frenzy, OI will be providing more details and advice here at Profit Pregame. Stay tuned.