Imagine you’re at a party and you hear about a brand-new startup that’s about to launch a revolutionary product.
You’re really excited about the potential of this company, and you wish you could get in on the action.
Well, an IPO is kind of like being able to RSVP to that party before it even starts! It’s your chance to be one of the first people to try out the company’s product and see if it’s worth investing in.
Plus, if the company ends up being a hit, you’ll be able to brag to all your friends that you were inside from the beginning.
If that company turns out to be really successful, it’s like winning the lottery, but without having to buy a ticket!
For 2023, the demand for new stocks will understandably remain muted, as the Federal Reserve continues to hike interest rates, damping enthusiasm for hot growth businesses that are lacking solid financial history, and keeping in mind that those hot and high-flying IPOs of 2020 and 2021 are now sitting in the doldrums.
But not me!
While we might not see the same level of hype as we were in 2021, don’t write off the 2023 IPO season just yet!
There are plenty of awesome companies that are ready to rock the stock market, no matter what the Fed does with interest rates.
And without further ado, here are some seriously exciting opportunities to invest in, as we look for the next big thing!
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Stripe
Arguably the most anticipated IPO of 2023, Stripe is definitely the biggest in the pipeline, with an estimated valuation of $74 billion.
Stripe is a company that simplifies the checkout process for businesses by providing online payment processing and a credit card payment gateway.
Its software-as-a-service (SaaS) makes transactions for online vendors simple and efficient.
It also safeguards its customers by detecting fraudulent payments and preventing questionable transactions.
Amazon, Alphabet, Shopify, Lyft, and Twilio are just a few of Stripe’s well-known clients (we even use it here in the office which makes me feel like a big deal now).
Through its network, Stripe has more than 50 businesses that processed transactions totaling around $1 billion, and in 2021, the business handled $640 billion in payments.
For comparison, PayPal processed $1.25 trillion in payments in 2021.
While just recently disclosing that they will reduce 14% of their workforce, Stripe’s IPO will still be closely watched, considering it has been a long-time coming and despite debuting with a flagging economy, Stripe remains on track to be among the biggest IPOs ever.
Make sure to stay tuned.
Discord
Discord is a network for text, audio, and video chat initially created for gamers and was introduced in 2015, by hardcore gamers Jason Citron and Stan Vishnevskiy.
The two created Discord to offer a more streamlined and straightforward method of communication while gaming.
Due to its low-latency chats and easy user interface, Discord immediately attracted a large number of gamers.
Eventually, they attracted users from all walks of life, with cryptocurrency traders, anime lovers, and other niche groups, joining the ranks of gamers.
Discord had 350 million registered users as of 2021, with over 13.5 million active servers and 150 million users per month, and being a privately held corporation, Discord doesn’t disclose its revenues.
However, projections point to revenues of $130 million in 2020, an increase of 188% over the $45 million that was projected for 2019.
Discord was supposed to launch the IPO in 2022 but a lukewarm equities market pushed back the IPO to 2023.
However, it was reported that the management of Discord declined Microsoft Corp.’s $12 billion takeover bid, which only shows the company’s confidence in its business!
Reddit
Reddit calls itself “the front page of the internet” and is basically a social media network.
The website is made up of more than 130,000 forums and communities referred to as subreddits.
These forums include discussion on every conceivable subject, including sports, video games, investing, news, and of course the infamous WallStreetBets, or WSB.
Fidelity’s $410 million investment during Reddit’s most recent funding round in August 2021 placed the company’s valuation at $10 billion and with an estimated 430 million people using Reddit each month, it is estimated that the business made $430 million in advertising income last year.
This social media juggernaut has been waiting for the ideal moment to enter the market for the better part of last year, after filing for an IPO way back in December 2021.
However, the market crash delayed their debut.
But with Reddit’s launch, I wouldn’t be surprised if the issue is oversubscribed, given the projected $15 billion valuation, and the cult-like reverence of meme-stock investors and members.
Be sure to watch Reddit’s IPO, as it may rekindle the frenzy of the “degens” from WallStreetBets, and have another meme-stock boom in 2023!
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But wait, there’s more!
Although ByteDance, the owner of the hugely popular short-video app TikTok, has consistently stated that there is no schedule for an IPO, a number of reorganization initiatives involving its Hong Kong firms have continued to spark rumors about a possible listing in the near future.
However, due to a regulatory crackdown on the internet sector and the deteriorating relations between Beijing and Washington, the Chinese start-up was forced to postpone its IPO last year.
All because of worries that the Chinese government would use it to spy on Americans, and censor content.
ByteDance was once the most valued start-up in the world, but regulatory restrictions and the current bear market reduced its valuation from $400 billion a year ago, to roughly around $300 billion.
Keep track of the developments regarding TikTok and the IPO of ByteDance, as this could be an opportunity of a lifetime!
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Just a Caveat
As we enter the latter stages of this bear market, it will be interesting to see how much demand there is for new offerings.
I believe investors should take their time to conduct their due diligence before committing to buy on opening day at any price, even though the typical “frenzy” out of the gate that IPOs often experience may be less exaggerated at this time.
Although 2021 levels of market hysteria are unlikely, the 2023 IPO lineup shouldn’t be taken lightly.
There are intriguing businesses that can withstand any policy changes by the Fed, switching from rate increases to possible rate reductions.
Even though the IPO hype may be tempting, don’t be a sheep and blindly follow the herd without doing your homework first.
After all, being an informed investor is way more fun and can help you avoid making rookie mistakes.
Don’t say I didn’t warn you!
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