Imagine if you'd known about a company before it started making massive gains in the market. You could only be so lucky!
Well, I’m here to tell you that it’s not all about luck. It’s more about finding companies that have strong growth potential. The types of companies that’ll be able to withstand the market for years to come.
In this circumstance, the early bird does catch the worm. Knowing about a company before it makes its debut or within its first year of trading could have a huge impact on your portfolio and wallet.
The biggest and most obvious opportunity with initial public offerings (IPOs) is investing in a company at the get-go.
These companies come onto the market and start to trade at an IPO price, which, ideally, should be the lowest price a share will ever be. Of course, that isn’t always the case. Companies do endure hardships that can result in a stock crash.
Amazon IPO’d in 1997 with its IPO price at $18 per share. In 11 short years, the stock is up by 7,950%.
Being one of the investors who'd invested at Amazon's IPO price, or even the first year of it trading publicly, would leave you set for life. Or at least it would give you a nice retirement cushion.
It’s not about luck or being at the right place at the right time. It’s about researching a company, finding out its market potential, and then finding out that it’s about to IPO.
It’s that simple.
But people get caught up with the high-valued companies that have been teetering on the edge of going public but haven’t made the leap yet. These companies tend to get the most hype from the public. And they’re usually the companies that people want to invest in when they IPO.
People see these kinds of companies as the next Amazons, Apples, and Googles. But what those people don’t know is that there are companies that have a greater potential to deliver long-term profits.
SpaceX is one of those companies that people can’t get enough of, especially with an eccentric CEO like Elon Musk. It seems like every day, there’s a new objective for the company. The company’s ambitions are high, which isn’t necessarily a bad thing.
But can the company finance those ambitions and remain a profitable company? If SpaceX were publicly traded today, that would be a huge concern to shareholders.
SpaceX has a lot of hype around the company. And it has a lot of future investors waiting for the moment that it announces it’s going public. But it shouldn’t have all your attention.
There are three anticipated IPOs of 2018 that you need to know about today. These companies have already IPO’d, but that doesn’t mean you can’t profit from what they have to offer in the future.
What you need to know when looking at IPOs is that it’s almost impossible for us everyday investors to buy shares the day a company IPOs. And honestly, you don’t want to.
The stock prices of newly public companies tend to fluctuate dramatically for their first year on the market. But investing in these companies could still give you the opportunity for some great medium- to long-term profits.
Now, let’s get to the three most anticipated IPOs of 2018…
First, let’s take a look at Dropbox (NASDAQ: DBX). It provides a global collaboration platform that gives users the ability to create, access, and share files with anyone they allow access to.
Because of its simple-to-use platform, the company is able to serve more than 500 million registered users across 180 countries.
There are a few factors that make Dropbox worthy of investors' attention. Its revenue has been increasing over the past three years. Back in 2015, its revenue was at $603.8 million. But at the end of 2017, revenue was reported as $1,106.8 million.
The company's net losses have been decreasing, and it's generated a positive free cash flow. This is what you want to see from a company. You want to know that the company is viable and will stay a company in the future.
Next up is DocuSign (NASDAQ: DOCU). This company is unique because it’s a market leader in the e-signature market. In fact, it’s the world’s No. 1 e-signature solution.
DocuSign’s cloud-based platform allows for more than 370,000 companies and hundreds of millions of users to make almost every agreement, approval process, and transaction digital — from any device!
More and more people are using this platform because it’s quick and convenient. In fact, 18 of the top 20 global pharmaceutical companies, seven of the 10 global technology companies, and 10 of the top 15 global financial services are DocuSign customers.
DocuSign has a lot of top clients, which is saying a lot. Those companies trust DocuSign’s platform and will only lead to more growth for it as a public company.
The platform is simple to use. And it can be embedded in the most popular and widely used business applications.
DocuSign’s overall sales have jumped 52% year over year. The company’s CEO, Dan Springer, said in an interview he was feeling “pretty good” about the company’s future profitability — despite the company’s history of operating losses.
Lastly, there’s Smartsheet (NYSE: SMAR). Like the other IPOs discussed in this report, Smartsheet is a cloud-based platform. If we’ve noticed anything about 2018, it's that investors are hyped about the cloud.
Smartsheet gives teams and organizations a place to initiate, manage, and deliver work at scale.
Revenue has grown 66% year over year. Some of its clients include Cisco, Starbucks, MOD Pizza, Weyerhaeuser, Cypress Grove, and South Water Signs.
And that’s not including Smartsheet’s other 92,000-plus customers. The company has been witnessing significant growth. Total revenue in 2017 was $67 million, compared to $111.3 million in 2018.
The way that people work and the platform they work on is changing. This doesn’t come as any surprise. Everything is shifting toward being more digital. And that means the need to seamlessly work together digitally is a crucial component. Smartsheet offers its customers with this effortless and seamless connection.
IPOs can be very exciting, especially leading up to a company’s market debut. But that’s not the only time when you can make a profit from IPOs. Investing in a company at the beginning, even within its first few years of trading, could greatly benefit your wallet.