Looking For Top IPO Stocks To Buy? 3 Names For Your List
The year 2020 has been a banner year for initial public offerings (IPOs), particularly for companies in the technology industry. The most recent IPO from DoorDash (DASH Stock Report) saw investors bidding nearly double their opening price. And just to refresh your memory, Snowflake (SNOW Stock Report) and Unity (U Stock Report), both of which listed just months back, are also recording strong gains of 46% and 122% respectively to date since their public debut this year. IPO stocks are typically attractive to investors because they could make major price moves within a few months after their IPO.
For those who are new to the stock market, you may be wondering what an IPO is. An IPO is when a privately-held company makes its shares available for trading on public exchanges such as Nasdaq or the New York Stock Exchange. An IPO may provide an opportunity for its existing shareholders to cash out and take profits. But the goal of going public is usually for companies to have easier access to funding. This is because companies will then be able to offer shares in the stock market, which could fund business expansion.
Those who have been watching the stock market closely know that it’s been an especially busy year for tech IPOs. And just when you think the IPO frenzy is over, 2021 could surprise you with a couple more tech IPOs, as unicorns like Robinhood, Stripe, Roblox, and Nextdoor are mulling for big IPOs. But these are still weeks, if not months away for investors to partake in. With DoorDash IPO being a huge success on its first trading day, it’s not surprising investors can’t wait to get their money out on the next big thing. With all that in mind, do you have these IPO stocks on your watchlist as we enter the second half of the week?
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Top IPO Stocks To Buy [Or Avoid] In December: Airbnb
Home rental start-up company Airbnb (ABNB Stock Report) is one of the best IPO stocks to watch this week. The unicorn company sold shares in its IPO at $68, pricing above its range, and will likely wind up being one of the year’s biggest IPOs. The company needs no introduction as it has already been disrupting the hotel and short-term property rental markets for years. The good news now is that investors will have a chance to own a stake in the formidable business.
Airbnb makes a substantial commission on each stay. Yet it’s still able to offer competitive rates compared to traditional players. It’s arguably a lucrative business as it takes the commission from both renters and owners. While some would say the increasing regulation on short-term rental might adversely affect Airbnb’s core business model, I personally don’t see it that way. If regulations can safeguard the interests of both parties, that could be positive. There would be tremendous growth for the company in the long run if travelers can stay at ease and owners can rent out their properties with peace of mind.
Most of the tech IPOs made their public debut with strong revenues under their belt. And that makes it harder for investors to buy at a more reasonable price. The ABNB stock, however, is completely different. The company has seen one of its worst years on record due to the travel restrictions as a result of the coronavirus pandemic. Its revenue plunged 72% in Q2 this year. The company had to lay off 25% of its staff to keep the company afloat. With vaccines on the brink of a roll-out, there’s a great chance the business will recover in 2021. I guess it’s also safe to say that ABNB stock is reasonably valued, if not cheap considering its circumstances. The chance to invest in a fast-growing company like ABNB doesn’t come around often. That said, would you rush in to buy ABNB stock when it goes public today?
Top IPO Stocks To Buy [Or Avoid] In December: C3.ai Inc
Software company C3.ai (AI Stock Report) is another hot IPO stock making big moves this week. The company’s stock price spiked as much as 174% on Wednesday on the first day of its public debut. For starters, the company focuses on enterprise artificial intelligence (AI) software. The value of the company is more than 100% above its IPO pricing amid a frenzied IPO market. That’s not too shabby for an IPO on the same day as DoorDash.
“Our market-entry strategy has been to establish high-value customer engagements with large global early adopters, or lighthouse customers, in Europe, Asia, and the U.S. across a range of industries,” the company said in its initial public offering prospectus. “These lighthouse customers serve as proof points for other potential customers in their particular industries.”
Apart from the software it provides, one more thing that has drawn investors’ interest in the firm is the founder of the company. And he is none other than former Oracle (ORCL Stock Report) executive Thomas Siebel. And if this isn’t enough to convince you, Microsoft (MSFT Stock Report) also invested in the company at the IPO. If the software company is good enough for Microsoft, it is no surprise investors are jumping on it. What’s more, the software is also compatible with the cloud services of Amazon, Microsoft, Google, and IBM. Users can also run the software in their own data centers. With such versatility, would AI stock be on your watchlist today?
Top IPO Stocks To Buy [Or Avoid] In December: FuboTV
For diehard sports fans, the word “ESPN” sure does ring a bell. For those who have never come across this company, ESPN used to be the king of sports-focused entertainment. But today, FuboTV (FUBO Stock Report) seems to be grabbing the attention of consumers. Since its public debut in October, FUBO stocks have already climbed around 200% from the company’s IPO price of $10 per share.
The company’s core streaming revenue comes from both paid subscriptions and advertising. Sports content remains one of the biggest draws in the entertainment world, and Fubo’s bundle of service seems to be an excellent choice for sports enthusiasts. The strong fundamentals of the company appeared to have also attracted investors’ attention. At the end of the company’s latest fiscal quarter, it had 455,000 subscribers, an increase of 58% from a year ago. Revenue in the quarter was 71% that in the same period last year. Looking at the segments, streaming subscription revenue was up 64% while advertising revenue jumped 153%.
Apart from streaming, the company is also expanding into the online sports betting space. With the acquisition of Balto Sports, you could say that the company is doing quite well in taking advantage of the current pandemic situation. And that could potentially become a huge growth driver for Fubo. With the gradual resumption of sports activities, would FUBO stock continue its recent momentum?