Are These The Best Stocks To Buy Right Now?
Looking for upcoming IPO stocks to buy? You’re not alone. Unless you have been living under a rock, you would know that the demand for initial public offerings (IPOs) has been red-hot, particularly for companies in the technology industry.
The rise in popularity of special purpose acquisition companies (SPACs) has been a major contributor to the IPO boom. For those unfamiliar, SPACs offer companies looking to go public via a reverse merger instead of the traditional IPO route. 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 today 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, and Nextdoor are mulling for big IPOs. With some of the hottest tech IPOs continuing to double on their first day of trading, I would be lying if I say I’m not interested in the upcoming IPO stocks. With all that being said, let’s look at some upcoming and recent IPO stocks.
Top IPO Stocks To Watch In 20201
- Coinbase (NASDAQ: COIN)
- Social Capital Hedosophia Holdings V (NYSE: IPOE)
- Roblox (NYSE: RBLX)
- Coupang (NYSE: CPNG)
Coinbase
Coinbase starts trading on the Nasdaq next week, and the hype is already building around the Coinbase IPO. As traditional investors are getting warmed up with the digital space, many investors are scrambling to get a piece of the leading crypto exchange. As a quick recap, Coinbase is the leading crypto exchange in the U.S. Founded by Brian Armstrong and Fred Ersham, the platform now has over 43 million users worldwide and has transacted more than $456 billion to date, according to the company’s latest filing with the SEC.
The company plans to focus on investments to help digital assets scale and succeed. If Bitcoin or other cryptocurrencies achieve widespread adoption, the user base would likely multiply. When that happens, you could be looking at a multibagger in the making. Of course, the reward doesn’t come without risks. There is no denying that Coinbase rests on interests in cryptocurrencies, which have seen wild price swings. From how I see it, COIN stock performance is likely going to be tied to Bitcoin’s price movement in the short term until we see widespread adoption of other cryptocurrencies.
With millions of verified users and currently profitable, Coinbase is looking at significant growth ahead. The company said it anticipates meaningful revenue, user, and net income growth through the rest of 2021. Considering the interest in Coinbase, it won’t be surprising to see the stock doubling on the first day of trading. Thus, if you are looking to get a piece of COIN stock when it trades, pace yourself.
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Unlike the rest of the list, Social Capital Hedosophia Holdings V is a SPAC. While IPOE stock shares pretty much the same fate as many SPAC stocks, this doesn’t make it an outright bad investment. As you may or may not know, the SPAC planned to take SoFi public. SoFi stands out as one of the most innovative fintech players around.
While SPACs may not have a fantastic rep, there is certainly potential with SoFi. There’s a popular saying when it comes to SPACs, which is to bet on the jockey, but not the horse. But can you say the same about IPOE stock? Now, don’t get me wrong, I have nothing against Chamath Palihapitiya. But some are not big fans of the previous companies that he brought public.
SoFi may not be a profitable company today, but that may change soon. In fact, the company announced in March a deal to acquire Golden Pacific Bancorp (OTCMKTS: GPBI). This acquisition is a key milestone for SoFi to obtain a national bank charter. To top it all off, the fintech company recently announced that its app will enable users to invest in initial public offerings of companies. Buying IPO stocks has long been exclusive to large institutional investors and the well-connected. But that’s about to change with SoFi. If you believe that SoFi will deliver great long-term returns, will buying IPOE stock on its recent weakness be a great idea?
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Roblox
Roblox, the household game for children and teenagers is the current talk of the town. Originally released in 2004, the game saw a massive influx of players during last year’s lockdown with over 150 million users at the height of the pandemic. Roblox has provided more than just excitement to investors that were able to get a piece of the IPO. Not surprisingly, RBLX stock saw a pop of more than 50% on its first day of trading. But since then, the company has been trading sideways, to the disappointment of some investors.
Roblox reported a net revenue of $666.2 million in 2020. According to a recent statement, the company is looking to expand its business by retaining current pre-teen users as they grow older while sourcing new content to attract a new user base among teenagers and young adults. But let’s face it, the business is based primarily on churning out big hits, which is no easy feat. Gamers can also be fickle, especially younger ones.
Perhaps you believe Roblox has powerful network effects that can be long-lasting, similar to what other platforms like Facebook (NASDAQ: FB) have. You would appreciate what Roblox could potentially bring to the world of gaming. With all that in mind, will investors bank on the hype or wait and observe its performance over time?
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Coupang
Coupang, dubbed the Amazon (NASDAQ: AMZN) of South Korea, has pulled off the largest US IPO so far this year. The South Korean company saw its share price skyrocketed 41% higher on its first day of trading. For those unfamiliar, the company made a name for itself through its guaranteed same-day or next-day delivery service. Despite retreating from its all-time high of $69 per share, CPNG stock is starting to get bullish coverage from Goldman Sachs.
On April 5, Goldman Sachs initiated coverage of Coupang with a $62 price target and a “buy.” The venerable firm said that the e-commerce company “has a substantial moat” due to its “nationwide in-house logistics and delivery network in {South} Korea.” Goldman is also generally upbeat on the e-commerce opportunity in South Korea.
As Coupang slowly snaps up the market shares in one of the largest and fastest-growing e-commerce markets, it makes sense to be bullish on CPNG stock. With CPNG stock trading sideways in recent weeks, would the recent price upgrade be enough to convince you to get on board?
