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There is something so tantalizing about a company going public. Buy the right new stock at a low price and you could wind up making it big with the next Amazon (AMZN) or Tesla (TSLA).
These 10 upcoming initial public offerings (IPOs) may offer that kind of stratospheric upside. But they also come with one big buyer beware: For every Apple (AAPL), there are countless more newly public companies that promise to change the world but only end up losing shareholders heaps of money. Between 1975 and 2011, for instance, over 60% of recently public companies saw negative returns after five years.
So if you do choose to invest in these IPOs, make sure to allocate no more than a small percentage of your portfolio to it. This rule carries over to investing in any company, though: Experts don’t want you investing large percentages of your cash in any one company, whether it’s newly public or has been on the New York Stock Exchange (NYSE) for a century. Diversifying your dollars across many companies, like through index funds, helps position your money to grow without putting all of your eggs in any single company’s basket.
Selected based on their unicorn-level valuations and headline-grabbing nature, these 10 initial public offerings may be the most talked about new companies over the next three months. These leading companies provide a range of services, and many were uniquely positioned to thrive during the Covid-19 pandemic. Here’s what you need to know.
Note: Valuations are estimates, may be based on previous rounds of venture capital funding or company projections and will likely be different than when the companies actually go public.
Valuation: $95 billion
IPO ETA: 2021
Life has been pretty good for the San Francisco/Dublin payment process giant. After raising $600 million in its latest round of funding, pegging the company at an eye-popping $95 billion valuation, Stripe could be one of the biggest, if not the biggest, IPOs in history thanks in large part to rising demand for e-commerce, which was put into hyperdrive during the pandemic. There’s no certain date for an IPO, but when it eventually does go public, Stripe could well be worth north of $100 billion.
Valuation: $70 billion
IPO ETA: Fall 2021
Amazon-backed electric pickup truck startup Rivian may go public later this fall and could fetch a valuation in the range of $70 billion. For a little perspective, that’s slightly higher than the current valuation of Ford (F). It’s not hard to see the appeal: Americans love pickup trucks and Rivian’s R1T looks cool, bills itself as capable of going anywhere and comes with a nearly $70,000 price tag. The current chip shortage has delayed production, but when it is up and running, Amazon will buy 100,000 vehicles.
Valuation: $39 billion
IPO ETA: 2021
A springtime round of fundraising pegged the online grocery-delivery business at $39 billion, although some reportedly believe that InstaCart could be worth upwards of $50 billion. In any case, InstaCart has likewise benefited from Americans staying home more than they wanted during 2020 as demand for delivered groceries grew. With a large reach, InstaCart could be one of the biggest IPOs this year (although it may opt for a direct listing).
Valuation: $12 billion
IPO ETA: 2021
Perhaps no company has better told the story of the weird Covid-era economy than Robinhood. The trading app that popularized gamified investing, albeit now sans confetti, ran into trouble and Congressional interest, after meme-stock GameStop captivated the nation for 15 minutes. Soon investors will be able to trade Robinhood on its own platform, and a recent round of funding had the company at a valuation close to $12 billion, though that number could well triple when Robinhood opens up to the masses.
Valuation: $10 billion
IPO ETA: Maybe 2021
Chat start-up Discord was recently in talks with Microsoft over an acquisition worth $10 billion that was ultimately deep-sixed. While there are no plans to immediately go public, Discord could very well look to the public markets in the future. And that’s for good reason: Gamers (see Roblox below) have fallen in love using the app’s instant communication abilities, and gaming has never been more popular. It now has 140 million users each month, earning the company $130 million in revenue last year.
Valuation: $8 billion
IPO ETA: Fourth quarter of 2021
Better.com may ride the recent housing boom to the public markets via a SPAC merger valuing the company in the neighborhood of $8 billion, according to recent reports. The digital lender may look to make its move sometime around the last quarter of 2021. It’s proven to be good business to facilitate mortgage loans, especially one that uses technology to replace traditional mortgage brokers, over the past few years. However, the tide may slightly change soon as the recent home price surge has somewhat quashed demand for home purchases.
Valuation: $4 billion
IPO ETA: Sometime in 2021
Nextdoor, the hyperlocal social networking company, may soon go large. With an estimated valuation pegging the San Francisco-based company in the small-to-mid-cap range, this new twist on neighborliness might go public sometime later this year.
Valuation: $4 billion
IPO ETA: Summer 2021
The maker of confectionary delights has enjoyed higher revenue over recent years and may soon re-enter public markets with a valuation in the neighborhood of $4 billion. After 80-plus years in business, and highs and lows along the way, a recent strategy of more central control over local franchises has helped boost sales, but the home of hot and ready glazed donuts still has a long way to go to reach rivals like Starbucks.
Valuation: $3 billion
IPO ETA: 2021
Another longer-in-the-tooth private company, Ascensus is in the business of offering tax-preferred savings vehicles, such as 401(k)s and health savings accounts (HSAs), to American workers. One benefit of longevity is that Ascensus would enter the public markets with more than 12 million customers and almost $400 billion in assets under administration.
Valuation: $3 billion
IPO ETA: Summer 2021
After considering an IPO five years ago, cloud computing firm Couchbase is primed to go public in the not-too-distant future. It filed paperwork with the Securities and Exchange Commission (SEC) back in March and could be worth upwards of $3 billion once it opens itself up to investors. That would be a healthy jump from an almost $600 million valuation during its last round of funding.
Once the afterglow wears off, companies go about the hard work of churning out profits and coming up with new products. While it’s still early days, here’s a quick recap of how well recent high-profile IPOs have performed.
And to highlight how fickle these recently public companies can be, keep in mind that of the 15 companies profiled here, a third have suffered large losses so far, about a third have seen small positive returns and the final third have seen impressive gains. All of this is to say that investing in recently IPOed companies can be an unpredictable mixed bag, which is why experts generally recommend highly diversified portfolios. This helps position your money to grow overall, independent of individual companies’ victories or losses.
Note: All stock prices are through June 7, 2021.
When It Went Public: June 1, 2021
Stock Price Change: 5.3%
The San Francisco-based fintech lender only recently made itself available to the public through a SPAC, so don’t read too much into its early performance. New companies, particularly SPACs, can be particularly volatile in their first years, so invest cautiously.
When It Went Public: Feb. 11, 2021
Stock Price Change: -40%
The popular Austin-based dating app hasn’t yet found love with investors after an initial burst of excitement when it first launched. What’s more, the uncertainty in the dating app market stemming from the pandemic has caused the company to get a little more conservative with its growth projections.
When It Went Public: April 14, 2021
Stock Price Change: -39%
The popular cryptocurrency exchange has fallen on hard times through the first few months of its existence as a public company as demand for Bitcoin has dropped off recently thanks to tweets by Tesla chief executive Elon Musk, rising concerns over the energy needed to mine the digital commodity and criminals using cryptocurrency to ransom huge corporations.
When It Went Public: Sept. 30, 2020
Stock Price Change: 145%
After a strong first quarter performance, Palantir Technologies, a data analytics company, has seen investor demand skyrocket thanks to a growing narrative about a company on the rise.
“We believe Palantir is prudently investing in ramping up its business to land a wider breadth of organizations from various industries, sizes, and geographic locations,” noted Morningstar analyst Mark Cash.
When It Went Public: Dec. 10, 2020
Stock Price Change: 2%
Looking at Airbnb’s stock performance, you’d think nothing that exciting happened over the past half-year. Even as vaccination rates have soared and people are traveling at greater frequency than earlier in the pandemic, analysts were less than impressed with Airbnb’s latest earnings report, causing the stock to endure a miserable May.
When It Went Public: March 10, 2021
Stock Price Change: 45%
The San Mateo, California-based gaming giant has enjoyed the nation’s stay-at-home orders more than others as gamers continue to gobble up its eponymous video game platform, raising the company’s stock value accordingly.
When It Went Public: Sept. 16, 2020
Stock Price Change: 2%
The cloud computing giant endured a choppy start to its existence as a public company, but it has been on the upswing in recent weeks after analysts grew more sanguine about its growth prospects.
When It Went Public: March 31, 2021
Stock Price Change: 7%
The online learning platform has seen a decent uptick recently after a long slide following its public debut. However, it’s still early days as the company tries to take advantage of the nation’s new comfort with doing things at home that they previously would have enjoyed in person.
When It Went Public: July 2, 2020
Stock Price Change: 98%
It’s been something of a rollercoaster ride for the upstart AI-dependent insurer, and that doesn’t even include an embarrassing social media snafu. After a promising start, Lemonade dropped following a disappointing earnings report. Since then, for some reason, the company has stabilized.
When It Went Public: Sept. 23, 2020
Stock Price Change: -15%
GoodRx has suffered through a bad first year. The digital healthcare company that promises to deliver cheaper drug prices saw investors sell off, especially after an underwhelming earnings report and increased competition from Amazon and Walmart.
When It Went Public: Aug. 6, 2020
Stock Price Change: 11%
The Detroit-based mortgage company has seen its stock yo-yo over much of the past year, despite a solid recent earnings report, perhaps due to cautious guidance it issued. Still, the stock is higher as demand for housing has soared during the pandemic, even as the number of available homes continues to lag.
When It Went Public: June 3, 2020
Stock Price Change: 30%
What’s old is new again. One of the big three music labels, Warner Music Group has enjoyed a renewed life as a public company over the past year thanks to a strong second-quarter earnings report and the promise of the return of live music as pandemic social distancing restrictions lift.
When It Went Public: Dec. 9, 2020
Stock Price Change: -22%
The new year hasn’t been kind to DoorDash. Despite increased demand for delivery food, the company hasn’t inspired much confidence in 2021. Its future, though, extends beyond food and depends on whether it can power “next-hour” commerce that will see everything consumers can dream of delivered in 60 minutes or less.
When It Went Public: Jan. 13, 2021
Stock Price Change: -35%
It’s been a tough road for the company that’s tried to make installment loans cool again. The heavily shorted buy-now-pay-later firm saw its revenue prospects suffer after Peloton, a close partner, issued a recall and well-heeled competitors, such as Paypal, stepped up their efforts.
When It Went Public: April 21, 2021
Stock Price Change: 5%
The robotics process automation company has enjoyed a solid rise in its first few weeks of existence, even delivering a better-than-expect first earnings report. Nevertheless, analysts were unimpressed and the stock suffered, falling from a 13% return since its launch to a 5% on June 9 after the report’s release.