Then average into the stock over time to spread out your cost basis. It’s far more important to focus on the business and business model, whether you like it or not, and where the business is likely to go in the future. There can be a fresh energy that can help them thrive.įinally, when investing in IPOs, don’t get too hung up on trying to trade the stock and get in at the very best price with one share purchase.
#Recent ipos to invest in free
Spin-offs are often interesting opportunities because these businesses are free to go it alone and seek out their best future, not work within the confines of the company they used to be a part of.
That’s different from companies that have always been independent and are just coming public through a traditional IPO. In a spin-off scenario we see the creation of a pure-play public company that was previously a business unit within a much larger organization. It’s also wise to recognize the difference between a spin-off and an IPO. Investors should expect there to be secondary offerings along the way. Or it’s a capital raising event that will raise money to keep the business running (not the ideal scenario for new investors) or fund growth initiatives (much more compelling, in my opinion). An IPO is usually a liquidity event that allows early investors to cash out part, or all, of their investment. But before we get to the stocks, a couple quick general notes on investing in IPOs.įirst, it’s critical to recognize that a company doesn’t go public because management just wants to expand the investor base to include you and me. Today I want to review three IPOs for 2022 that I think can deliver significant gains in the year ahead. Many of these business offer exposure to large and growing markets that, in my view, investors should have exposure to. Potential stock price returns aside, I’m excited by much of what I see. Given that our Cabot Early Opportunities advisory services focuses on early-stage stocks I’ve spent a good deal of time evaluating the 2021 crop of IPOs.
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