Before discussing IPO success stories, we need to know what an IPO is. An initial public offering or IPO is the first time a private company avails its shares to the Public. By going Public, a company starts raising funds from numerous investors, enabling growth and expansion. Investors may either trade these shares available on the market or get them in the IPO cost. Furthermore, an IPO enables investors to explore its potential profit and growth.
If you’re a new comer to this buying and selling industry and also have doubts about whether to place your cash on an IPO or otherwise, then this information is suitable for you. A few examples of investors gaining success by investing in IPOs include:
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Alibaba (2014)
Alibaba, the Chinese e-commerce giant, went public in 2014 on the NYSE (New York Stock Exchange). The founder of SoftBank, Masayoshi Son, invested $20 million in Alibaba. The report says his company’s worth was stated at $60 billion. Keep scrolling the share market live to stay updated about the stock price.
Google (2004)
Google, the tech giant, went public with its IPO in August 2004. Various investors recognized its innovative advertising model and search engine that showed great promise. Micheal Moritz, an early investor, invested $12.5 million during its starting days. As soon as this company went public at $85/share, his investment was worth more than a billion.
Beyond Meat (2019)
This company is concerned about plant-based meat substitutes. They planned to go public in 2019. Many famous investors were looking for this company’s IPO as the requirement for plant-based diets was increasing heavily. Notable investors, including Leonardo DiCaprio and Bill Gates, invested their money into this company during its starting days. Soon, the company’s stock price showed huge growth upon going public.
Amazon (1997)
In 1997, Amazon.com went public at an IPO price of $18 per share. While the company faced skepticism about its unconventional business model, founder Jeff Bezos’ vision eventually paid off. Those who invested early in Amazon’s IPO and held onto their shares witnessed remarkable growth. By 2021, Amazon’s stock was trading well over $3,000 per share, making early investors who held onto their shares enormously wealthy.
Facebook (2012)
Facebook’s IPO changed the market drastically. All the early investors cherish that moment. Similarly, people who missed the IPO regret their decision. In 2012, Facebook went public at $38/share. Venture capitalist Peter Theil had already invested $500,000 before the IPO. He sold some portion of it at the IPO price and made around $ 1 billion.
Zoom Video Communications (2019)
Zoom’s IPO in 2019 captured the market’s attention due to its innovative video conferencing technology. Priced at $36 per share, Zoom’s stock experienced immediate demand and closed at $62 on its first day of trading. The COVID-19 pandemic further accelerated Zoom’s growth as remote work and virtual meetings became the norm. By 2021, the stock had surged to over $300 per share, making it a standout success story from the IPO class of 2019.
Snowflake (2020)
Snowflake, a cloud-based data warehousing company, made waves using its highly effective IPO in 2020. Costing $120 per share, the stock opened up at $245 on its first day’s buying and selling. As organizations more and more switched to cloud-based solutions, Snowflake’s stock soared, reaching over $300 per share within days. The company’s unique data handling technology and its potential in the data analytics market attracted investors looking for disruptive tech stocks.
Coinbase (2021)
Coinbase’s IPO marked a substantial milestone for that cryptocurrency industry. Costing $250 per share, the stock opened up at $381 on its first day’s buying and selling. As curiosity about cryptocurrencies surged, Coinbase’s platform acquired prominence like a user-friendly gateway for purchasing, selling, and storing digital assets. The stock’s initial success reflected the growing mainstream acceptance of cryptocurrencies as well as their underlying technology.
These examples show the potential rewards of identifying and investing in companies having strong fundamentals and growth prospects before they go public. One thing that everyone needs to be careful about is that the IPO investment comes with high risk. It’s not always necessary that all IPOs perform well, as many companies fail to excite their consumers. Putting efforts into researching and gathering information is essential for investing. Investors can also look for upcoming IPOs 2023 to prepare themself for future investments.
How to Invest in an IPO – Quick Steps
Research
- Understand what an IPO is and its potential risks and rewards.
- Research the company’s industry, business model, financials, and prospects.
- Study the IPO prospectus for essential information.
Choose a Brokerage
- Select a brokerage that offers IPO access.
- Set up an account if you don’t have one.
Monitor IPO Calendar
- Stay updated on upcoming IPOs and their launch dates.
Express Interest
- Indicate your interest through your brokerage platform.
Allocation and Confirmation
- Receive an allocation confirmation if selected.
- Check the number of shares and price.
Funding
- Ensure funds are available in your account for the shares.
Place Order
- Place your order for allocated shares before trading begins.
IPO Day
- Monitor the stock’s trading debut and opening price.
Monitor and Manage
- Stay informed about company news and market trends.
- Decide when to sell based on your goals.
Be Patient and Informed
- Consider a long-term perspective for potential growth.
- Approach IPOs with caution and seek advice if needed.
Conclusion
IPO investment is a great way of earning a profit, but one needs to be careful before choosing a company: so they don’t end up making a loss. It doesn’t matter whether you are a beginner or an experienced trader, gathering information about the company’s fundamentals and understanding its business model is the only way to achieve success.
