iStock,.com/holwichaikawee Strong IPOs vs. Weak IPOs
There are few better ways to make strong gains in a short period than through an initial public offering (IPO). IPOs are a fantastic entry point for investors, as they represent the first opportunity for investors to get in on what may be a revolutionary, exciting, or otherwise solid company.
Before its IPO, a company exists in the realm of private finance (where most people simply don’t have the funds to participate), but post-IPO, it’s fair game.
But IPOs can also be dangerous—as we’ve seen in the recent past—because, once companies hit the public markets, they’re not just selling dreams, they have to begin to make a coherent pitch to investors of all stripes.
So how do investors tell the difference between a strong IPO and a weak one?
Let’s take a look at several recent initial public offerings, dissecting what made each one successful (or not), and what lessons you can use to profit from future IPOs.
Beyond Meat IPO
We couldn’t rightly publish this article without examining the 2019 IPO that everyone has been talking about: Beyond Meat Inc (NASDAQ:BYND).
Beyond Meat stock has surged by as much as 300% since its IPO, representing one of the strongest returns we’ve seen from a major new stock in years.
So what made BYND stock so appealing to investors when it hit the market? It’s a simple yet potent combination: innovation mixed with solid foundations.
The innovation part comes by way of the company being the first meat-alternative stock to hit the open market. That means the company is giving investors a chance to gain exposure to a fast-growing new market.
Innovation and novelty, as we’ve seen countless times before on the stock market, often wins out.
Now, innovation and novelty on their