The U.S. IPO market was closed during the recent government shutdown, but bankers are still confident that 2019 will be a strong year for deals. That's according to a new survey by BDO USA, which found 71% of capital market executives at leading investment banks believe IPO activity will increase, or at least be flat, with 2018, the best year for deals since 2014. The survey was conducted in December when markets were already experiencing a correction, but bankers remained optimistic despite more than half of them expecting further corrections in 2019.
Lyft looks set to debut on Nasdaq on Mar 29 under the symbol “LYFT.” Lyft plans to sell a little more than 30 million class A shares and anticipates investors to purchase the stock in the range of $65 to $75 a share.
If all goes according to plan, Lyft will be the biggest U.S. technology IPO since Snap Inc. (SNAP) in 2017 and the tenth-largest technology IPO of all time in the United States.
And we can’t forget about Uber Technologies. Uber is going public in April with an expected valuation between $100 - $120 billion. And we can’t forget about Airbnb, Slack, Palantir, WeWork, Peloton, Pinterest, Postmates. Yes, all these unicorns will hit the public market this year.
ETF investors who want exposure to these newly listed companies can invest in Renaissance IPO ETF (IPO). The Renaissance IPO ETF usually incorporates new issues within 90 days of listing and kicks out older ones after two years of public trading. The Renaissance IPO ETF IPO provides diversified exposure to newly public companies before they join other core US equity indexes.
NOTE: Google GOOGL and Facebook FB were included in the S&P 500 index about two years after going public.
Top sector holdings of IPO are:
Top holdings include:
And the performance has been stellar of the last 3 years.
And the performance is even more stellar year to date.
$1000 invested in Nvidia when it went public in January 1999 would be worth over $100,000. $1,000 worth of Amazon stock in 1997, would be worth over $800,000. Love it or hate it, $1000 in Tesla, would be worth over $15,000. $1,000 invested in Netflix at IPO would be worth an impressive $200,000 today.
My point is the opportunity to make BANK is to get in these companies early and this ETF allows an investor to do that while diversifying his/her risk.
The chart suggests if price breaks the Monthly Supply at $31 to the upside, to buy on the pull back.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.