The IPO Team Sheet for 2020
Hands up if you bought an initial public offering (IPO) last year! Every other week, investors were introduced to a new venture-backed tech unicorn going live on the Nasdaq or S&P 500. As double or quits speculations, many went kaboom early on before post-IPO arcs curved the wrong way, leaving big losses and massive hangovers for investors under their influence.
Some think venture capitalists have given ‘story stocks’ a pass during the “Great Bull Run,” funding their growth to scale before cashing out in billion-dollar IPOs. They say debut day means job done, enriched insiders able to bail and leave stock pickers saddled with their unprofitable firms. The 2019 IPO crop was a mixed bag. Some listings reflected these ideas, but bulls take a different view on the whole.
They point to dominant market shares and say they’re getting in early to great brands with end-markets here to stay. It’s fair. Uber, Lyft, and Pinterest are already household names, for example, waiting for scale to grant them profitability. In 2020, a new batch of superstar companies will go public for willing opportunists.
The biggest and most hotly anticipated is Airbnb! The online lodging broker is flirting with profitability having forced hotel chains to throw out their business models and try again. It’s tipped to join markets through a ‘direct public offering’ (a DPO), avoiding the all-or-nothing hail mary moment at the opening bell of an initial public offering.
Postmates is also planning to go public one way or another. It’s an online platform used to order things on-demand. Think of it like Deliveroo and Uber Eats, except not only for food. As a 24/7 service, it lets customers buy time (over 11 million hours of it last year). Time is a lucrative business, and the firm turned over one billion dollars in 2018. Not bad!
DoorDash could list alongside Postmates, as well as a chain of nighttime driving ranges with restaurants. That company is called Topgolf International, mixing golf and entertainment at venues popping up all over the States. It’s one to watch alongside work management tool-maker Asana, tech dev favorite GitLab, trash bag company Reynolds Consumer Products, and “bed-in-a-box” mattress firm Casper Sleep!
If IPOs are your thing, it seems 2020 definitely has you covered. We’ll bring ‘em all to you on Invstr. Which has your backing?