ETFs That Let You Play The HOT IPO Market

In 2019 the Initial Public Offering market has been on fire. We have seen huge pops in share prices from some of the big-name companies like Uber, Levi Strauss, Lyft, Pinterest, Zoom Video, CrowdStrike, Chewy, and of course Beyond Meat. And actually, Beyond Meat was the “biggest popping U.S. IPO since 2000”.

The vast number of fast-growing companies that have hit the market in 2019 and the promise that investors see from these stocks has caused some investors to take on more risk than they should when they rush in after the large pops and buy up shares of the already somewhat inflated stock.

This leads to the biggest challenge of investing in newly public companies, which is first determining which ones are the next Pet.coms and which ones could go on to become the next The risk is extremely high with recently IPO’d stocks, and especially ones that have seen some of the increases we witnessed in the first half of the year because in most cases profits are still none existent. But a few different Exchange Traded Funds are available which will give you exposure to these hot new IPOs, but minimize your overall risk.

Instead of cherry-picking which recent IPO’d stock or stocks you think can become a monster winner from here, you can buy all of them and feel good knowing you will have some skin in the game. So, let's take a look at which ETFs you may want to research further. Continue reading "ETFs That Let You Play The HOT IPO Market"

IPO ETFs A Better Way To Play Lyft, UBER, And Other Hyped Listings

The IPO market is back on fire and investors are once again falling over each other trying to get a piece of the newest publicly traded companies. The recent initial public offering of Lyft (LYFT) is a perfect example of why investors really should avoid getting caught up in the hype of a big IPO. To see why all you need to do is look at the stock chart of Lyft and see how it has fallen after its amazing ‘pop’ on its first day of trading.

The stock has a high of $88.60 per share, but is currently trading below the $60 per share range and has fallen as low as $54 per share. Lyft is not the only example of this flawed IPO process. Facebook (FB), Snap (SNAP), Blue Apron (APRN), DropBox (DBX) are just a few of the other bigger name IPOs that have had lots of hype surrounding them and nice jumps on the first days of trading but soon fell out of favor with investors. With Facebook, while it may have taken some time to gain traction, the stock did come back from its post IPO fall and has performed well for investors, but the others have yet to do so.

The issue with heavily hyped IPOs is that the companies rarely live up to the hype and the stock soon falls below IPO prices as investors realize growth and actual fundamentals of these companies don’t match the pre-IPO hype.

Now, this isn’t to say that all IPOs are failures. Roku (ROKU), DocuSign, (DOCU), BJ’s Wholesale Club (BJ) are all examples of recent IPOs that are trading higher than their initial public offering price and have rewarded shareholders.

So, you may be wondering how you filter out the IPO winners and loser? Continue reading "IPO ETFs A Better Way To Play Lyft, UBER, And Other Hyped Listings"

The Only Way I Would Play The IPO Market

Matt Thalman - Contributor - ETFs

With the recently highly hyped Snap Inc. (NYSE:SNAP) initial public offering, I was once again reminded why I don’t attempt to buy into IPO's.

While big name company's first offer their stock to the general public, its call an initial public offering, or an IPO. While there are a number of issue's with buying stocks the first day they start trading, the biggest one is the hype!

The hype surrounding a big name IPO, such as Snap, Facebook, or Twitter to name a few, is that the demand for shares outweighs the supply on the first day of trading. Millions of people want shares and most fear if they don’t get them early, they will miss a big move higher. This hype and fear frenzy often causes shares to skyrocket in the first minutes to hours of trading. Snap for example rose 45% on day one.

But, after the hype fades, so will the stock price. The demand declines to the point that those looking to sell have to be willing to part ways with their precious shares for much less than they sold for on day one. Snap fell 27% on its second day of trading. Continue reading "The Only Way I Would Play The IPO Market"