First, off you might ask yourself what exactly is an IPO? IPO stands for initial public offering and it is when a private company first starts letting the public buy and sell shares of the company on the stock market. An initial price along with number of shares is established in an underwriting process that puts a valuation on the company. The IPO process involves companies meeting requirements set by the exchanges and the Securities and Exchange Commission (SEC). An IPO is often a great time to buy into a company before the stock prices surge. So, what are some good recent IPOs to keep an eye on?
The dating app Bumble (BMBL) issued their IPO a month ago in February and it has already caused a lot of buzz. On February 11th, before it dropped its IPO, it’s shares were priced at $43 apiece, above its target range of $37 to $39. It immediately began selling almost 77% above that for a price of $76. Bumble’s stock price has fluctuated over the past month of trading and it is currently trading around $69.76 per share. Overall, I think there is a lot of demand in this market and a lot of room for growth. Their CEO has talked about plans to monetize their friendship side of the app, Bumble BFF, next year in 2022.
The online gaming platform Roblox (RBLX) issued their IPO this past Wednesday, 3/10/21, with a suggested price point of $45. Wednesday, on its first day of trading, Roblox stock prices went up more than 54%, closing at $69.50. The stock climbed another 6.3% on Thursday, closing at $73.90. The Roblox IPO is a little different because it is a direct listing or direct public offering, meaning no new shares of the company were created. Instead only existing, outstanding shares are sold, which means the shares aren’t diluted by creating additional shares for the public.
Another IPO I’m keeping my eye on is Coupang (CPNG), which has been called the Amazon of South Korea. It just had it’s IPO release today, 3/11/21, with a suggested price of $35. When trading began this morning it opened with shares selling at $63.50, but the excitement calmed throughout the day and the price closed at $49.25. But in after hours trading it’s been on the rise and is priced around $52.35. There is definitely a lot of potential in this company, especially being an early investor.
IPOs can be great opportunities to buy in early, but as always the price could also drop. What do you think about Bumble (BMBL), Roblox (RBLX), and Coupang (CPNG)? Leave me a comment and let me know if you think these are good investments or a waste of money.