2 IPO Stocks Exploded Out Of The Gates This Week
The market for initial public offerings (IPOs) was strong in 2020 and shows no signs of stopping. This week, we have the highly anticipated IPOs from Coupang (NYSE: CPNG) and Roblox (NYSE: RBLX). Both are seeing their revenue ballooning during the pandemic. You could almost say these two companies are swimming in cash. South Korean e-commerce giant Coupang saw its revenue increase by 90.8% year-over-year. While that revenue growth is simply impressive, gaming platform Roblox is not doing too bad either. Revenue for the popular gaming hub came in 82% higher to reach $923.9 million.
Tech IPOs in the past year have often followed the same pattern. That is, teasing retail investors with a price that is only accessible to a few institutional investors. Retail investors soon arrive and rush to get in on the action. The real question here is, should investors even consider buying CPNG stock or RBLX stock right now after their initial pop?
Instead of rushing to answer this question. What really matters after the initial pop depends on how quickly insiders eventually cash out, right? The truth is, many of the insiders will eventually cash out and the outcomes are as one would expect. Just take a look at Spotify (NYSE: SPOT). The streaming company saw its shares stagnate for a few years after the initial pop before the run-up in 2020. Now, this is not to say the same could happen to either CPNG stock or RBLX stock. But investors might want to think twice before placing bets. With all the hype going around these two companies, it’s worth digging deeper before making a decision. If you are one of the investors looking to buy into these new entrants, read on.
Coupang IPO (CPNG)
Coupang, dubbed the Amazon (NASDAQ: AMZN) of South Korea, has pulled off the largest US IPO so far this year. The company saw its share price skyrocketed 41% higher on Thursday’s trading. The company made a name for itself through its guaranteed same-day or next-day delivery service. With the spike in CPNG stock price, the company fetches a valuation of $84.5 billion. Coupang’s debut is the biggest for a foreign company since Alibaba’s (NYSE: BABA) blockbuster 2014 debut.
The company also sees strong potential for further expansion. That is because South Korea is home to one of the largest and fastest-growing e-commerce opportunities globally. The country’s total e-commerce spend could grow to $206bn by 2024, from $128bn in…