Mission Wealth’s philosophy is that of a long term investor, and short term trading of IPO’s is a risky proposition. Overall, if we are going to invest in private equity, we generally prefer the debt or real estate asset class because we can invest at a fraction of the value of the equity holders (debt) or have real third party appraisals to establish fair value.
- Lyft opened around $80 and now trading at $48.50.
- GoPro opened at $35, soared to over $100 before dropping back around the IPO price six months later (but further falling thereafter).
- Snap opened at $27 and has never seen that price since (as low as $5).
- Blue Apron opened at $10 and is trading below $1.
- Spotify opened at $150, soared to $200 and seven months later, it has not traded above the opening price.
- Dropbox opened at $30 and trading above that mark shortly before dropping to $20 and settling around the $25 range.
- iQiyi (Netflix of China) opened at $15, soared to $40 before dropping to the IPO price eight months later.
Going back in time, Facebook did not trade above the IPO price until about 8 months afterwards.
However, not every IPO goes this way but these are good examples of the highest profiled IPO’s of this past year. Several that have bucked the trend recently have been Roku, Carvana and The Trade Desk (3 out of the 10).
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Mission Wealth is a Registered Investment Adviser. This commentary reflects the personal opinions, viewpoints, and analyses of the Mission Wealth employees providing such comments. It should not be regarded as a description of advisory services provided by Mission Wealth or performance returns of any Mission Wealth client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data, or any recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Mission Wealth manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
