Recently, the stock market has been exceedingly volatile. The market has put investors to the test, from pandemic-induced sell-offs to record highs in 2021 and a rough 2022. Investors should evaluate long-term performance rather than short-term volatility when looking for the finest stocks to buy.
What is the IPO?
The procedure through which businesses open their capital to the stock market by selling a portion of it as shares. Initial public offerings (IPOs) are a way for start-up companies to raise capital from investors. Early investors who can sell their shares at a better price use them as an exit plan.
How to be informed about upcoming Initial Public Offerings?
The IPO announcement will have a company’s regulatory filings for registering and issuing new shares. The announcement can take anywhere from a few weeks to over a year. However, depending on a filing for IPO, investors typically have six months’ notice.
Why would a business decide to go public?
Going public is a common approach many businesses use to raise funds for expansion. When it goes public, a company’s primary goal is to raise money, but it also has secondary goals such as consolidating and enhancing its reputation.
And it is because submitting to the stock market entails allowing the market (supply and demand) to value your firm without your ability to influence any aspect of the process.
If the assessment is positive, the company will be consolidated as a value to gamble on. As a result, many businesses launch massive advertising efforts once they decide to go public. They want to be the center of attention so that their initial public offering (IPO) is as successful as possible.
Is buying IPO a good idea?
When investing in an IPO, caution is advised for all investors. It is determined by the type of investor you are. More importantly, the company and the underwriters influence the timing of an IPO and will strive to assemble the community of companies at the most advantageous time.
This period could happen during a boom or bear market. A higher price is good for the company and the bankers, but it could limit future investment opportunities.
Many firms’ stocks, especially those considered “hot,” climb above their IPO price on the first trade day. After the initial excitement has died down, buying into an IPO on the secondary market can be a terrific strategy.
What are the top ten IPOs?
Here is a list of the top ten upcoming IPO in 2022.
Discord
Discord is a PC gaming-centric internet communication network with a free video, audio, and text chat program that allows users to converse about their mutual interests. The platform is comparable to Skype. Non-gamers have found Discord useful as well.
Although Discord was founded in response to a need for gaming communications, it will likely expand into the professional communication industry. Discord IPO is likely to release in early 2022. The company is currently worth $17 billion, and the IPO is expected to draw much attention.
Valuation: $17 billion
IPO ETA: Mid 2022
Features of Discord
- Used on any platform.
- While gaming, screen sharing, and live communication are possible.
- It makes organizations and communities possible.
- Compatibility with other apps is important.
- High-definition audio
Instacart
Instacart is an online grocery delivery assistance that works with local merchants to fulfill and deliver your order on the same day. Unlike other supermarket delivery services, the company does not keep fresh produce in a huge warehouse. In May 2022, the firm filed for an initial public offering (IPO).
Instead, their shoppers use their website to shop at local grocery stores like Costco and then submit their orders to one of their part-time employees. This personal shopper visits the store, purchases everything on your shopping list, and delivers it to you in their vehicle.
Valuation: $39 billion
IPO ETA: Mid 2022
Features of Instacart
- Customers can shop for groceries at various shops such as Costco, CVS, Sam’s Club, and Wegmans. The company serves more than 25,000 different grocery stores.
- Provides new product promo codes and discounts to help you save money while shopping.
- Allows loyal clients to upgrade to the Instacart Express program for free, which provides faster and limitless delivery.
- Provides skilled shoppers with a customized shopping experience.
- It also provides on-the-go alcohol.
The IPO date for Reddit has yet to be disclosed. However, in December, the company filed a confidential draft with the Securities and Exchange Commission (SEC) to start the IPO process.
It is looking for a valuation of about $15 billion in the IPO. The company will use the money to improve product features, making it easier for newcomers to explore and comprehend the site and developing a self-service advertising system that could appeal to small and medium-sized enterprises.
Valuation: $15 billion
IPO ETA: Early 2022
Features of Reddit
- You can clarify all doubts in a community that you may have.
- Unique content
- It’s simple to use.
- An online community has highly rigorous spam restrictions.
Chime
Customers can open fee-free checking and savings accounts with a debit card and direct deposit using the Chime app. When clients use Chime’s debit card, it earns money by taking a percentage of merchant transaction costs.
It offers a cost-benefit advantage over banking services with features such as no monthly fees and a fee-free overdraft. Chime has created partnerships with regional banks to develop more cost-effective financial solutions than those offered by other institutions.
Valuation: $40 billion
IPO ETA: Early 2022
Features of Chime
- ATM Access
- High Yield Interest Rate
- Automatic Deposits and No Foreign Transaction Fees
- Automatic Savings Feature
Databricks
The Apache Spark founders launched Databricks, a data analytics platform that combines engineering, data science, and business operations to speed innovation.
Databricks SQL, Databricks Data Science & Engineering, and Databricks Machine Learning are the three environments available for developing data-intensive applications in Azure Databricks.
Valuation: $38 billion
IPO ETA: Mid 2022
Features of Databricks
- It provides a notebook interface that allows various coding languages to be used simultaneously.
- It is based on Apache Spark, tuned for Cloud settings.
- It boosts productivity by allowing users to deploy notebooks into production immediately.
- It connects to various data sources to enable free Big Data analytics.
Stripe
Stripe, situated in San Francisco, develops software for e-commerce enterprises and this year surpassed Elon Musk’s SpaceX with a valuation of $95 billion. Musk was an early investor in PayPal’s payments software, with PayPal graduates Peter Thiel and Max Levchin. In early 2021, the company raised $600 million in its most recent fundraising round, valuing it at $95 billion.
Valuation: $95 billion
IPO ETA: Mid 2022
Features of Stripe
- Revenue enhancement
- Payment processing
- Fraud and conflict resolution
- Reconciliation
- Payouts
Mobileye
Mobileye is a firm that creates advanced driver-assistance systems (ADAS) such as cameras, computer processors, and software for driverless vehicles.
With alerts, adaptive cruise control, lane centering, and collision avoidance, Mobileye’s technology substantially improved auto safety.
Valuation: $50 billion
IPO ETA: Second quarter of 2022
Features of Mobileye
- Adaptive Cruise Control
- Forward Collision Warning
- Automatic Emergency Braking
- Intelligent Speed Assist
Better.com
Better.com democratized the mortgage industry by replacing it with a digital approach that eliminates extra stages, commissions, fees, and time-consuming branch appointments. Over the last few years, facilitating mortgage loans, particularly those that employ technology to replace traditional mortgage brokers, has shown to be profitable.
Better.com’s platform offers a digital marketplace with affordable quotations from various insurance providers for the seamless purchase of a homeowner’s insurance policy and immediate access to leading real estate brokers around the country.
Valuation: $7.7 billion
IPO ETA: Mid 2022
Features of Better.com
- Fixed-rate mortgages
- Adjustable-rate mortgages
- Conventional mortgages
- Refinancing
- Jumbo loans
Plaid
Plaid is a company that connects your financial accounts and allows you to exchange data with an app, service, or organization. This omnipresent yet almost unnoticed product has the potential to be tremendously profitable: According to sources, revenue increased by 60% to $170 million. Plaid shareholders want to benefit as Americans’ financial lives become more digitized.
Valuation: $13 billion
IPO ETA: Mid 2022
Features of Plaid
- Identity Verification Option
- Income validation
- Credential-Based Workflow Option
- Comprehensive API
- ACH Authentication Tool
Impossible Foods
Impossible Foods is an agri-food startup that employs molecular research to develop dairy, real meat, and fish replacements. While most rivals don’t employ synthetic components in their plant-based goods, Impossible Foods focuses only on genetically altering nutrients and proteins to make faux meat taste “meaty.”
The Impossible Foods IPO was set before April 2022, but the date is likely to be pushed back due to continuous market instability.
Valuation: $10 billion
IPO ETA: Mid 2022
Things to consider before buying upcoming IPOs
If you’re still interested in a particular IPO after thorough study, mark your calendar for the date when shares of the newly public firm will be available for purchase on the open market.
Depending on share availability, you can make Purchases through a brokerage account on the release day. Individual investors can buy stock directly through an IPO by participating in small/mid-cap growth mutual funds, many of whom are avid IPO buyers.
Conclusion
An initial public offering (IPO) is an exciting opportunity for investors, but they often happen rapidly, so you need to be a fairly active investor to learn about them. It may seem apparent, but read the company’s prospectus or get a financial counselor to explain it before making any decisions.
