Participation in IPOs are increasingly growing amongst retail investors, ranging from automotive marketplace providers like ACV Auctions, along with digital cloud providers such as DigitalOcean, to consumer electronics brands like Vizio.
With a number of IPOs expected to be made available this week, Maxim Manturov, Head of Investment Research at Freedom Finance Europe, advises on his top three IPOs to watch out for this week.
Manturov said, “This week will see a number of different IPO’s hitting the market and with so many to choose from I have outlined my top three IPO’s to watch out for this week. ACV Auctions, DigitalOcean, and Vizio operate in different sectors and each bring something unique and innovative to the table,” explains Maxim Manturov, Head of Investment Research at Freedom Finance Europe.
“ACV Auctions has gathered a lot of interest in the automotive industry since its inception in 2014. The company provides a digital marketplace for wholesale vehicle transactions and data services that offers transparent and accurate vehicle information for customers.
“It is the first software start-up in Western New York to be valued at $1bn, making it one of just over 500 unicorn companies in the world. This is no surprise considering it has facilitated over 750,000 wholesale transactions between 21,000 dealers and commercial partners. Last year it revealed it took in a revenue of $208m and with an expected share price ranging between $18-$20 it is a great company to keep an eye on this week.”
“DigitalOcean, a digital cloud provider, is another company I advise to watch out for this week. The company is looking to raise up to $775.5m when its IPO goes live on 23 March and is expected to price between $44 – $47 per share.
“Unlike the top three cloud providers – Amazon Web Services, Google Cloud and Microsoft Azure – DigitalOcean provides its platform and tools to developers, startups and SMEs.
“By targeting these smaller organisations it is able to provide a simple offering in a market that is clouded by larger players providing heavily complex products which are often difficult for small businesses to navigate. This might explain why it attracts five million monthly unique users to its website.”
“My final IPO to watch out for this week is Vizio, which is expected to hit the market on 24 March. The Californian based consumer electronics brands is predicted to price between $21 – $23 per share. Vizio makes smart TVs and sound bars and has developed a smart TV operating system, SmartCast. Since its inception in 2002 the company has sold 82.2m televisions and 11.8m sound bars, making it a major player in the affordable TV and sounds equipment market.
“One interesting point that caught my attention was that it had net income of $102.5m on revenue of $2.04bn in 2020, compared with earnings of $23.1m on revenue of $1.84bn in 2019, showing its popularity during the pandemic.
“Looking to the future Vizio aims to increase it capitalization and financial flexibility through the IPO while also using the net proceeds for general corporate purposes, including working capital, operating expenses and capital expenditures.”