If you are looking to make huge leaps in your investment returns when it comes to the stock market, the best place to look would be the recent IPO listings. An Initial Public Offering or IPO is when a private company first makes its shares available to the general public and appears on the stock market. This is often in a bid to garner more financial support as more investors buy into the company thus spurring its growth. Looking to cash in on newly listed companies is often risky, as one cannot guarantee continued growth of the company’s valuation. However, risks are all part of the capital market game, especially if you are aiming to grow your returns.
Between 2014 and 2016, the market saw a drastic drop in the number of IPOs and M&As. This hiatus however took a turn in 2017 when the IPO market finally finished the year in a respectable fashion. 2018 however saw a spike in the number of IPOs creating scene of investor heaven. Big companies including tech unicorns like Dropbox and Spotify finally joined the market’s listing, prompting investors to fork out big bucks just to get a piece of the pie while it is still hot.
With the current flux of new listings, it can be difficult for one to choose which companies to buy into, especially if you are an international stock trader that does not understand the market very well. A hasty decision can result in major losses such as the one faced by investors that bought into Snapchat’s parent company, Snap, when it announced its IPO in 2017 just to face major disappointment as it was trampled over by its competitors, such as Instagram and Facebook. So here are a couple of newly listed stocks you should keep in mind in 2018.
Dropbox is an online storage platform where people can save and share files and data. The file hosting innovation is one very competitive track race with platforms such as Google’s Google Drive, Microsoft’s OneDrive, and the more enterprise-oriented Box battling it out for the top spot. Since its inception, about a decade ago, Dropbox has been more tailored to the consumers. It has, however, of late been seen to be making moves towards a more business oriented market. It’s growth in that direction makes it a good stock to watch in coming years.
This was reflected when it made slightly less than $1 billion on the day of its IPO in March. Within a month the price per share had gone up from $21 to $28.92 and is predicted to continue on the upward trend as the company seek to grow their market share.
Spotify is another tech unicorn that long hit a valuation of more than $1 billion. The company, unlike most newly listed companies, is one that has been around for about 15 years. Founded in Sweden, the music streaming platform boasts of way more monthly users than the ubiquitous Apple Music.
Spotify took the path less travelled when it opted to apply for direct listing. This means that the shares made public were those that belonged to employees and private investors. However, the company expects a growth of about 30% in 2018 and even more in future years as they aim to grow the number of premium users by 46% within the year and thus grow their revenue.
This Beijing-based smartphone manufacturer launched its IPO in Hong Kong. Though the launch fell short of the $10 billion forecast by almost half, resulting in a shortfall in valuation, many investors will still be looking on to see how the company recovers and grows before committing to it.
When the data security giant opened its IPO in March, its share value doubled in value within the first day. However, the spike has now levelled off at a price of $27.22. Due to its efficiency in cyber security and investment in expansion of its cloud server, this company could be one to watch over the next few years.
Other worthy mentions include the Chinese stocks, Huya and nLight, whose share prices have gone up by about 170% since their IPO announcement. Lyft and Pinterest are companies whose IPOs are being eagerly awaited by investors in the world over, especially those looking to trade in overseas shares. These stocks and many more are worth watching as they year unfolds as all wait to see if they will match up to expectation, or if they will fall short like many that came before them.