Let’s Go, IPOs! Everything You Need to Know
Investors are going wild for initial public offerings (IPOs).
But with 40 new companies joining the market so far this year, and many more on the way, it can be difficult to understand what IPOs are and how you can benefit.
In today’s Bold Profits Daily update, I outline the three most important things to know about investing in IPOs:
- What an IPO is and what it means for a company’s shares.
- Why IPOs can help raise a company’s shares by thousands of percentage points.
- How you can start investing in IPOs the right way.
Check out my video below.
Bold Profits Daily
May 7, 2019
Give me an I. Give me an P. Give me an O. IPO. In this week’s Bold Profits Daily, I’m about to tell you about a phenomenal opportunity that’s unfolding in the stock market right now. It’s all about IPOs.
Just as a start, in case you don’t know what an IPO is, it stands for initial public offering. In this week’s Bold Profits Daily I am going to tell you all about it: What they are, why they can generate a stock that can go up by 50%, 100% or 150% in one day.
And, third, I’m going to tell you how you can get into IPOs. So let’s get started.
First, what is an IPO? An IPO is a first-time sale of shares from a previously privately owned company. Just think about any big company that you hear about all the time:
Amazon, Google, Tesla. These were all previously private companies. They were funded by rich people, by large institutional money, pension funds, and even the wealth funds of various countries like Norway and Saudi Arabia.
And they never had publically traded shares. In other words, if you wanted to buy a share in these companies before they went IPO, you simply could never do it. For the vast majority of people private companies are out of bounds. You simply would have no avenue by which to invest in it.
So, for very rich people who are very well-connected and have to be specially qualified as investors, they have to show that they have a lot of money, like worth of over $1 million or more, they can get in at the private level. However, for regular investors like you and me, we get in at the IPO. Every once in a while the stock market is a great place to get into IPOs and that is where we are today.
In fact, last week there was an unbelievable IPO — a company called Beyond Meat. This is a company that produces meat, essentially by synthesizing it. Instead of having a farm and having to raise a cow and slaughter the cow to get the meat, they have come up with a recipe to make meat in quantity. Essentially, factory-made meat, the way we make everything else.
This Beyond Meat IPO went up by 163% in one day. That’s right: one day!
This gain was the greatest gain in an IPO in nearly 20 years. Which is why I believe that it’s important for you as an investor to pay attention to these IPOs. Because I believe many of these IPOs are good deals, especially because of what I’ve been telling you.
There’s one group of companies in the stock market that I believe are obsolete and are going to do to zero. They are going to be replaced by these IPOs. They are going to take over entire parts of our economy.
Why are IPOs set up sometimes to go up in such huge amounts so quickly? It has to do with two things.
First, it’s how many shares the company is going to be selling in the IPO. That’s really really important. As you might imagine, the fewer shares there are and there’s a lot of demand, the more people are going to be attracted to it.
That’s if the second thing is right. What’s the second thing? Price. If there are a only a few shares and the price is right, now you have the magic of what drives Beyond Meat’s IPO up 163% in one day. And where you have other setups like that.
I have a lot of experience with IPOs. In fact, I invested in Google at the first IPO and did very well. It taught me there is a certain recipe to capturing the gains in the IPO market. It’s a very unique, very unusual market. You really really have to focus on these small details and make sure you get it just right.
Many IPOs are a bad deal. However, the good ones can be like Beyond Meat. They can give you huge gains and they can give you long-term gains like you have in Google and Amazon, which have gone hundreds or thousands of percent since the IPO.
How can you get in on this IPO madness currently going on in the stock market?
If you were a big investor then you would call up Goldman Sachs or JP Morgan …and say, “Hey, can I get a few shares?” Perhaps if you have several billion dollars they might give you a few hundred shares or a few thousand shares. Because that’s the way it works. The big investors that pay JP Morgan and Goldman Sachs big money through brokerages and fees and stuff like that, tney get preference.
Maybe if you’re a super wealthy investor like Warren Buffett and you were interested you would get some shares. For the regular folks, it’s hard to get into. Which is why I would tell you that some one of the big superstar IPOs, regular investors can’t get in.
But the smaller ones — and there have been a number of these: PagerDuty up over 50%, Jumia Technology up nearly 90%, Zoom Media up almost 100%. These IPOs fly under the radar.
This is why my publisher and I have decided that we think we can put together an unbelievable, phenomenal publication with incredible research that can give you the opportunity you deserve to get into the IPO market.
I believe the IPO market is going to stay hot and continue to generate massive, incredible phenomenal winners for the next three and maybe even five years. As the old world of these old companies fades to zero, these new companies are going to come in and take their place and capture their value. It’s going to make their stocks go up.
That’s our Bold Profits Daily for this week. The IPO market is red hot. You should get in on it.
The way you can get in is through an ETF. It is the Renaissance IPO ETF (NYSE: IPO). This ETF buys pretty much every single IPO that comes through over the last 100 days.
It’s an ETF, meaning it owns a lot of IPOs and holds them for as long as two years.
Of course, you can never get the single exposure to Beyond Meat by just owning the Renaissance IPO ETF. However, it will give you enough exposure to this market. If I’m right and the IPO market is going to stay hot for a while, this ETF which is already up in excess of 33% this year — almost double the S&P 500 — it’s going to go up and continue to go up.
That’s my Bold Profits Daily for you this week. I’ll have another one next week. Until then, this is Paul saying bye.
The What, Why and How of IPOs
When it comes to IPOs, there are a few things you need to keep in mind.
First, you need to know that IPOs are the first time a previously private company has offered public shares. So now, instead of being funded solely by wealthy backers or trust funds, the company has decided it wants to get support from the public.
I have some experience trading with IPOs. In fact, I was able to get in on the ground floor of Google’s IPO back in 2004.
I made a decent profit then. And now I want to share my IPO strategies with you.
So stay tuned for more information about my brand-new service centered around trading IPOs.
But until then, I recommend buying into the Renaissance IPO ETF (NYSE: IPO).
This exchange-traded fund lets you benefit from all of the latest IPOs that have debuted so far this year, and the ones that have yet to make a splash.
Editor, Profits Unlimited