To enter the stock market, companies realize an IPO through an IPO ( Initial Public Offering ) better known as of IPO . This operation transforms them from private companies to companies accessible to the general public. It is a crucial step in a company's stock market journey, especially since many analysts believe that a successful IPO is a good signal for a bright future on the stock market . Before going any further, a question deserves to be asked: Why is the procedure of an IPO important in the life of a company?
So, in this very detailed guide, we want to give a complete and exhaustive presentation of what an IPO is. First, we will present you the French, American, British and international IPOs to watch in 2021 ; just to stay in the news. Afterwards, we will define the concept, the advantages and the disadvantages for the companies which carry out an IPO.
We will answer the question of the importance of the IPO in the life of the company. Next we will develop how the price of shares is formed through IPOs and how to buy shares in a broker. Advice will be given to you to make your investment profitable after a company has gone public. At the end of the day, we'll tell you which IPOs to watch for the year 2020.
How to Invest in an IPO?
After we've introduced you to the financial term IPO in full, you must be wondering how to invest in an IPO. The answer is simple: choose a broker and follow the stock market investment process linked to that broker.
In this guide, we will do a demonstration for you with the eToro broker.
Here are the 5 steps to follow to invest in an IPO with eToro:
Why eToro? Because it allows you to invest in the stock market without any commission on the shares . Both beginners and expert traders can find their account on this trading site, which offers interesting features such as social trading or a demo account to practice.
1- Open an eToro Account
Username is the name that appears at the top of your screen. Email is important in the confirmation process and the password helps you secure your account.
Once you have put this info, check the two boxes at the bottom. One acknowledges that you accept the terms and conditions and the other is to agree to the cookies policy.
2 - Check your Identity
Identity verification is important for eToro to confirm the legal existence of the trader. To do the verification, you go to the dashboard, you will see 'account', fill out the form and send an ID.
The form will ask you for some personal information, which will be validated when you submit the ID.
3 - Deposit of Funds
Also in the dashboard you will see the option 'deposit funds'. You click on it, a page will open and ask you to enter the amount and choose the payment method you want to use to credit your account.
Note that eToro offers a variety of payment methods on its platform.
4 - Choose the Action to Buy and Invest
The choice of action is much simpler. You will just click on the name of the company in the search bar. Then, once you've rocked the search, you'll see the action appear. You click on it to start investing in the business.
Then, you can configure your investment as you wish. Choose your Stop Loss, Take Profit or your leverage if your purchase is in CFDs.
While waiting for the companies listed in this guide to go public, you can invest in companies from all walks of life on eToro. We can cite Apple , Google or Amazon among hundreds of others.
Which French IPOs to watch in 2021?
This year, there are a lot of French companies that have raised the idea of filing their IPO prospectus to be part of the Paris stock exchange .
The majority of them are motivated by the idea of raising the necessary funds to finance their growth and expansion projects, the desire for public recognition is a strong argument in the universe of reasons for entering on the stock market .
The French IPOs to watch in 2021 are:
Let's look at IPOs in more detail.
1 - Tivoly IPO
Tivoly is a French company founded in 1917 by Lucien Tivoly. It specializes in the design and manufacture of cutting tools and portable power accessories.
It is mainly owned by the Tivoly holding which owns 73.1% of the company's shares (2019 figures).
Tivoly IPO, for when?
On November 24, 2020, the company announced after a meeting of its board of directors that the IPO will take place at the end of January 2021. The company favors the transfer of listing of securities which according to the responsible will allow them to decrease the costs associated with the quotation on the stock market.
Why should you take the Tivoly IPO?
The Tivoly IPO should be watched very closely because the company is the French leader in its sector . Then, Tivoly provides ranges of very good quality and inexpensive products on the market.
It is a company with more than a century of history in the French business community. How many companies have been able to resist for up to 100 years? So, you traders, we recommend that you stay informed about the Tivoly IPO.
Pherecydes Pharma was founded in 2007 and operates in the biotechnology sector. Its main activity is to manufacture treatments against resistant bacterial infections.
The company is owned by ACE Management, Elaia, Go Capital, Omnes Capital, Karista, Fa Dièse, BMSystems and private investors.
IPO Pherecydes, for when?
The French biotech company filed its initial public offering on January 20, 2021 with the objective of financing its first clinical trials of phage therapy treatments. In fact, the company is looking to raise 7-8 million euros. To do so, Pherecydes intends to place 166,599 shares on the market at a price of 6 euros per share.
The securities will be available on Euronext Growth on February 9 . Officials have spoken of the place for an increase in the supply of securities but this will depend on the pressure of the market to acquire the shares of Pherecydes Pharma.
Why should you follow the Pherecydes IPO?
The Pherecydes share promises a lot on the financial market as the company operates in a sector with high potential . The company is the pioneer of bacteria-killing viruses. She has developed more than 10 years of experience in this bacteriological sector; which makes it a French benchmark internationally.
3 - Stellantis IPO
Stellantis is a multinational company specializing in the automotive industry. It is a company that was founded on January 16, 2021 after the merger between the PSA group and Fiat Chrysler Automobiles.
So, Stellantis includes under its banner the major car brands like Peugeot, Maserati, Dodge etc ... Although the merger has 14 brands to its credit, Stellantis is only sixth in the ranking of world car manufacturers.
IPO Stellantis, for when?
Stellantis has in fact already gone public on January 18, 2021 on Euronext . It issued 3,119,934,695 at the time of the IPO. Stellantis share quotation stood at 12.570 euros. Stellantis' market capitalization during the IPO was € 39.2 billion. As of January 20, the share had reached 13,904 euros, until then the peak of the Stellantis share.
Should we be interested in this IPO?
The Stellantis company did not explode on the stock market contrary to forecasts. Its price stabilized between 12-13 euros. To date, the share has never fallen lower than its IPO price. This indicates a touch of optimism for the future of the company on the stock market.
We must understand that with the health crisis, the real estate sector has not been the most efficient on the market.
Good to know: while waiting for the IPOs of these companies, you can already buy shares of French CAC 40 shares on eToro. We can cite Bouygues , EDF , Orange or FDJ among many others.
Which American IPOs to watch in 2021?
Almost every day, new American companies are entering the United States stock market. Since the New York Stock Exchange is the largest stock exchange in the world, American companies are more than tempted to make their IPO with the hope of raising enough in this fundraising.
Here are the U.S. IPOs to watch for 2021:
Let's look at these IPOs in more detail.
1 - TikTok Global IPO
TikTok is a social network founded in 2016 by Chinese company ByteDance that exploded in the eyes of the world during the lockdown period in 2020.
The company has exploded on in the technological world because of its multiple innovative features in the entertainment industry. It has 689 million users to its credit and is ranked 7th in the ranking of the most used social networks in the world.
Tiktok IPO, for when?
Currently, the market value of the social network is estimated at 180 billion - and many are eagerly awaiting its IPO!
Why should you be interested in the Tiktok IPO?
Like other tech companies, TikTok stock may well hit the stock market after its IPO. The company has a really solid foundation and its popularity continues to grow day by day.
With these 682 million monthly active users, TikTok will undoubtedly be one of the sensations of the stock market this year . It is very popular with young people and its platform could serve as a Network for Networking and Marketing.
2 - Airbnb IPO
Airbnb is an American company founded in 2008 that specializes in rental and reservation services for homes. The company has established itself in more than 192 countries and has more than 7 million users.
Unfortunately, since 2018 because of the weight of regulations, the company has struggled to develop. The health crisis has indeed plunged him even more to the edge of the precipice.
When did the Airbnb IPO take place?
Airbnb went public on December 10, 2020 on the New York Stock Exchange . At the time of the introduction, the Airbnb share was listed at $ 68. It didn't take more than a day for Airbnb stock to soar on the stock market.
In fact, Airbnb stock rose to $ 146 a share the day after the IPO; which increased the company's market capitalization to $ 86.5 billion.
Why should we be interested in Airbnb's IPO?
Airbnb's IPO comes after the company has racked up more than $ 2 billion in debt. However, despite the company's difficult financial situations before the IPO, Airbnb really did hit the stock markets .
Currently its stock is trading at $ 192.74 on the market - hence a 190% increase from its entry! You can already take advantage of this promising stock by buying it on a stock broker like eToro .
Starlink is not a full-fledged company. It is a satellite internet access project launched by Elon Musk's aerospace company, SpaceX .
This project is currently being deployed. Musk sets a clear and precise goal with Starlink. 40 million subscribers by 2025 for a figure of 30 billion dollars.
Starlink IPO, for when?
Rumors of a 2020 IPO for Starlink were carried out against a backdrop where close observers believe Musk wanted to separate Starlink from SpaceX.
In fact, in a recent tweet, Musk confirmed the possibility of an Initial Public Offering but on condition that revenue growth will be steady and predictable .
Why should we be interested in this IPO?
The Starlink project is a very ambitious project and could be one of the big competitors of 5G. SpaceX plans to develop satellites outside of the United States to expand its network around the world. These straightforward facts will make Starlink a promising IPO .
4 - Instacart IPO
Instacart's services are provided on a mobile application. Company services are available in more than 5,500 cities but only in the United States and Canada.
Instacart IPO, for when?
The Californian company plans to go public in 2021 . It chose Goldman Sachs as the bank to ensure the stock market listing. Moreover, the CEO of Goldman Sachs has indicated that he plans to raise more than $ 30 billion at the time of Instacart's IPO.
Why should you follow the Instacart IPO?
Instacart is a highly anticipated IPO in the United States because the company performed very well in 2020 .
Instacart's IPO is promising for the company's statistics over the past year. The CEO had said that during containment, the growth they achieved in five years occurred in 5 weeks. In addition, the company is expected to grow by 50% in 2021!
5 - Robinhood IPO
The company owes its popularity to its non-invoicing of transaction fees but also to the simple and intuitive interface of its platform. The number of users has increased from 400,000 to 13,000,000 in the space of 7 years.
Robinhood IPO, for when?
Robinhood chose Goldman Sachs for its IPO dossier and analysts say the entry is worth $ 20 billion. The IPO will surely be during this year 2021 but the precise date has not been revealed by officials. However, Pre-IPO commands can be performed.
Why should you follow the Robinhood IPO?
Robinhood's action could truly be one of the revelations of the year . First, its meteoric growth in the online brokerage sector . Then, his fame in the market could be beneficial to him.
Finally, the company could put its own stock on its trading platform .
6 - IPO Eaze
For those who do not have a medical marijuana license, Eaze provides their Eaze MD app which offers live video call consultations with doctors on demand. In 2017, three years after its launch, the company grew by 300%.
IPO Eaze, for when?
Speculation about Eaze's IPO has been coming back since 2018 but it may be 2021 . The company has not announced how it wants to proceed with the IPO and how much funds it plans to raise.
Why should we be interested in the Eaze IPO?
Eaze differentiates its services from other medical marijuana services by optimizing its delivery algorithm which allows most deliveries to occur between 10 and 20 minutes .
In view of this analysis of the competition, Eaze may well claim a successful IPO on the New York Stock Exchange.
7 - DoorDash IPO
Another business that operates from a mobile application. DoorDash is a food delivery service company that is available in the United States, Canada and Australia. It was founded in 2013 and since then it has seen tremendous growth in the market.
The company reports that more than 800,000 deliveries are made per day on its platform, nearly 245,000 merchants use its platform.
When did the DoorDash IPO take place?
Doordash launched its IPO on December 9, 2020 . Like Airbnb, Doordash's IPO was a success. In fact, its quotation has increased by 86%, going from $ 102 to $ 188 per share.
Investors said it was a good time to launch the IPO as the company performed very well in 2020.
Why be interested in DoorDash's IPO?
Some believe that Doordash's IPO is overstated given the growth of Doordash in the markets. Now, Doordash's stock is buying at $ 198.22. Compared to the price of the IPO, that's an increase of 94%!
The Doordash company has been successful for months in the food delivery sector in the USA. The Covid has allowed it to gain more traction in the United States market. It is not insignificant that one day after the IPO, the share of Doordash rose 86% . We could have chosen Airbnb but given its poor results during the Covid, we did not include them
So far, Doordash's IPO has been a pure success and investors can include these stocks in their portfolio with confidence. eToro offers you the opportunity to invest commission-free in this share, starting now.
Good to know: While waiting for the IPOs of companies that have not yet done theirs, you can already buy shares of US stocks from the Nasdaq and the NYSE. on eToro . We can cite Tesla , Facebook or even Netflix among many others.
Which UK IPOs Should Be Watched for in 2021?
According to statistics from Statista, the London Stock Exchange is the second largest stock exchange in the world. This makes it a very attractive stock exchange space which hosts nearly ten IPOs each year.
For 2021, here are the UK IPOs to watch on the London Stock Exchange.
All the details regarding these upcoming IPOs are below.
1 - Darktrace IPO
It's a company created by government cyber intelligence executives and a few mathematicians.
IPO Darktrace, for when?
Darktrace is planning its IPO for 2021 with the goal of being able to raise £ 3.8 billion. Darktrace's IPO appears to be delayed due to legal proceedings against Lynch, one of its founders. The IPO should be done long before but the Covid prevented it.
Why watch Darktrace's IPO?
The British company is a world benchmark in its field and many see the company doing well on the stock market after its entry. Through innovative technologies. Darktrace is a while with more than 15 years in the world of cyber intelligence.
Darktrace has a worldwide reputation in its sector. The cybersecurity sector is becoming a major issue in today's digital world. A business that comes with a formula that includes privacy and security will capture a large share of the market. That's what Darktrace is trying to do. Its action may therefore be a hit on the stock market.
2 - EG Group
EG Group is a British company based in Blackburn which specializes in retail services in gas stations and food outlets. In 2019, the company reported that it crawls more than 5,866 sites with a turnover of 20 billion euros.
The company is owned by TDR capital (50% of the shares), Zuber Issa (25% of the shares) and Mohsin Issa (25% of the shares).
IPO EG Group, for when?
This IPO had been announced since 2019 but it did not take place. There is a strong possibility that the IPO could be completed this year 202 1 after more than a year of announcement. In 2019, when rumors of the company's IPO were rumored, it was said to want to raise £ 10 billion on the stock market but this amount was never confirmed by the company.
Why follow EG Group's IPO?
The market has been on the lookout for the IPO for about a year. Despite negative results in 2019, the company still remains viable . We do not expect that its action will not be a flash in the stock markets but it will be a good asset to bet for its long-term prospects .
3 - Trustpilot IPO
Consumers can create free accounts to share experiences with businesses, and businesses can create free accounts to respond.
Trustpilot IPO, for when?
In November 2020, the Trustpilot team said it plans to make its Initial Public Offering in 2021 , with the goal of raising $ 1 billion in financial markets.
Why monitor the Trustpilot IPO?
Having seen company executives leave the ship, Trustpilot has had a dark day but after the pandemic and many investments in automatic feedback services, it has given the company a little breathing room. So interest in Trustpilot should not wane.
4 - IPO Deliveroo
The company serves more than 10 countries around the world. In 2018, the company achieved a turnover of £ 476million but suffered a net loss of £ 232million.
Initial Public Offering Deliveroo, for when?
On January 18, 2021, Deliveroo announced that it will go public in 2021 . According to information relayed by Business Insider who had been in contact with a source close to the company,
The PO will be able to be done in April 2021. If the company waited to launch its IPO it is surely because of the 2020 procedure of the CMA for violation of the principles of the competition.
Why follow the Deliveroo IPO?
Deliveroo is a company that can have the same background on the stock market as its American counterpart. However, the American stock exchange does not have the same structures as that of London. Should we expect a vertiginous growth of the Deliveroo share on the stock market? If this increase occurs, will it be resilient?
5 - McLaren
The company was founded by Bruce McLaren. Currently the company is owned by Bahrain Mumtalakat Holding Company which owns 56% stake in the company.
McLaren IPO, when?
After the CEO of the company raised the idea of a restructuring, rumors of an IPO of McLaren Group became frequent. The IPO will be very important for the company which after the coronavirus which is experiencing working capital problems. This is why he also borrowed from the Bank of Bahrain.
Should the McLaren IPO be watched?
The pandemic has really had an impact on businesses. That said, it plunged the McLaren group into financial crisis. So, for the stock market future of the Mclaren group, one cannot be optimistic about the performance of the sector in the London Stock Exchange in the short term, but the long term may be more promising.
6 - Jaguar Land Rover
It specializes mainly in the design and manufacture of luxury and sports cars. The company sells a car every minute.
Jaguar Land Rover IPO, for when?
Jaguar Land Rover's IPO had been announced since 2019 but has not taken place. This year, the market is betting on the IPO of the British manufacturer. Although there is no specific date for the IPO , it is already announced as one of the IPOs that could mark the London Stock Exchange.
Jaguar Land Rover IPO, for when?
Jaguar Land Rover is a British benchmark in the automotive industry, especially for luxury cars. Its IPO should be a success but should not experience dizzying growth given the performance of the automotive sector.
7 - VUE International
The multinational operates in 10 countries including nine European countries and Taiwan. The company was forced to close its doors because of the health crisis in March. She tried to reopen but not to the same success as before the Covid.
IPO VUE International, for when?
In 2018, Vue international's IPO was postponed because one of the major shareholders had considered selling his stake in the company. The IPO of view could finally be done this year because the company intends to raise a lot of funds after being greatly affected by the health crisis.
Should we be interested in the IPO of VUE International?
The verdict on the international IPO is rather average given that the pandemic is still hitting the countries of Europe hard . The vaccine does not mean that things are going to be back to normal soon. Although this is a company with very good foundations, its IPO should not shake the London Stock Exchange.
8 - BrewDog IPO
He is a major investor in Crowns & Hops, a craft beer brand and brewery project that aims to become the first black-capital brewer in Inglewood, California.
BrewDog IPO, when?
BrewDog had raised 1.2 million pounds during a crowdfunding last September. The company is planning its Initial Public Offering for the year 2021 . Currently, the company has a market value of $ 2 billion and made 300 revenues in 2019. It is a highly anticipated IPO in the UK .
Should we be interested in the BrewDog IPO?
Brewdog had lost nearly 8million pounds in the first half of 2020 but was able to rely on online sales.
We cannot predict exactly what will happen the day after Brewdog's IPO, but we know that it is a company appreciated by the English. This beautiful brand image will thus be able to play in the favor of this company.
9 - The Proof of Trust
It has the only globally patented protocol specifically designed to act as an assurance layer, validating data and preventing the execution of invalid or insecure smart contracts.
IPO Proof Of Trust, for when?
The company had announced its desire to make an IPO in July 2020. This IPO could take place this year 2021 if everything goes as planned by the managers of the company.
Should we be interested in the IPO Proof Of Trust?
The Proof of Trust could be one of the best UK Initial Public Offerings for this year. The company is very innovative and offers business solutions adapted to blockchain technology .
This company could be a hit, since the market tends to overestimate IPOs from tech companies.
Good to know: While waiting for IPOs from companies that have not yet done theirs, you can already buy shares of UK FTSE stocks on eToro . We can cite Barclays, BP, easyJet, GSK, Marks and Spencer, Shell or Unilever among more than 350 other British stocks .
Which international IPOs to watch in 2021?
Internationally, there will be quite a few IPOs that can capture the attention of investors in major stock exchanges around the world. We know what we're talking about.
As we will see, Lamborghini, the luxury car brand will indeed make its debut. This must really have a big impact on the Milan stock exchange. We also have ByteDance, the company that gave birth to TikTok can enter the Shanghai Stock Exchange. Let's take a closer look.
1 - Vantage Towers (Vodafone)
The company would have made 945 million in revenue in 2020 and 95% of this revenue comes from tower sites.
Vodafone IPO, for when?
Prior to its IPO this year 202 1, Vantage Towers was worth 20 billion. But earlier this year, Vodafone UK announced plans to transfer its 50% stake in UK-based Cornerstone to Vantage Towers.
2 - ByteDance
If you want to know what the company behind TikTok is, it's ByteDance . It is a Chinese company founded in 2012 that specializes in the design and development of mobile applications.
According to Bloomberg, the company is worth $ 100 billion. For 2019, ByteDance had achieved 20 billion in turnover and three billion in profit.
IPO ByteDance, for when?
ByteDance had planned its IPO since the year 2020, but since its competitor, Kuaishou has received the approval of the authorities to go public. Its competitor plans to collect 5.4 billion.
In order to catch up with its competitor, ByteDance is speeding up the procedure for an IPO and it could take place in 2021 .
Should we be interested in the ByteDance IPO?
ByteDance's IPO, like its daughter company Tiktok, could have a very good IPO. This, in part thanks to the explosion that TikTok experienced during the year 2020 and beyond.
3 - Lamborghini IPO
The company was going out on a period of growth in turnover. Rightly, Lamborghini's turnover increased by 28% compared to 2018. But, the health crisis has just catapulted the sales of the company.
Lamborghini IPO, for when?
Rumors about a Lamborghini IPO started in October. But there is not yet a specific date for the IPO at the moment.
This IPO will have an impact on the structure of Volkswagen as the German manufacturer will be ready to release Lamborghini from the Volkswagen group.
4 - Barbeque Nation Hospitality
Barbeque Nation Hospitality is a chain of restaurants based in India.
The company offers meals, drinks, live grilling and other related services. Barbeque-Nation Hospitality serves clients around the world.
IPO Barbeque Nation, for when?
The restaurant chain has received approval from market regulator Sebi to raise around Rs 1,000 to 1,200 per share through an initial public offering.
The IPO includes a new issue of shares valued at Rs 275 and an offer to sell 9822,947 shares, according to recent draft documents filed with the Securities and Exchange Board of India (Sebi).
Good to know: While waiting for IPOs from companies that have not yet done theirs, you can already buy shares of international equities on eToro . You can invest in hundreds of stocks on the Frankfurt, Oslo, Hong Kong or Saudi Arabian stock exchanges.
What is an IPO (Initial Public Offering)?
An IPO (Initial Public Offering) or French initial public offering is in its most simplistic definition: an operation by which a private company decides to put a set of securities on the market to allow the public to buy them. They say the company goes public. So that is what an IPO is.
The IPO is an important step for companies, especially startups looking for funding . The latter can indeed serve as an option of an IPO to recharge one's batteries.
Long before discussing how an IPO works, it is important to clarify the types of IPOs. Among the types of IPOs, we can mention:
IPO and Firm Price Offer
As part of the fixed price IPO process, the company and its underwriters value the assets, liabilities and all financial aspects of the business. They then work with those numbers to set a price per issue to reach the target funds .
This fixed price per issue is printed in the order document. The order document justifies the price by qualitative and quantitative factors. The demand for securities is not known until after the closing of the issue. Oversubscription levels are high in fixed price offers, sometimes several hundred times.
IPO and Open Price Offer
In the case of open-price offering construction, the price is discovered during the IPO process . There is no fixed price, but there is a price range. The lowest price in the range is called the 'floor price' and the highest price is called the 'ceiling price'.
The price range is printed in the order document. And investors can bid for the quantity of shares they want at the price they want to pay. Depending on the offers, the share price is decided. Securities open above or at a price equal to the floor price. Thus, demand is determined every day, as the price is established.
IPO and Minimal Price Offer
The principle of minimum price offer is that we sell a set of securities at a specific price to investors. This implies that no offer will be accepted below the determined price.
The listing of securities means the admission of a company's securities to trading on a stock exchange such as Euronext, NYSE and FTSE. In fact, it is not compulsory under the Law on Listed Companies. It becomes necessary when a public limited company wishes to issue shares or bonds to the public .
What is the Procedure for Making an IPO?
Here are the different steps that a company must follow to make its IPO Initial Public Offering:
Step 1: Choosing an Investment Bank
The first step is to select an investment bank as an underwriter. The role of an investment bank is to help the company know:
How much money does the company hope to raise
The type of securities that will be offered
The initial price per share
Step 2: Preparation of the IPO Prospectus
The next step in the IPO process is the creation of the Prospectus for an IPO . This step is carried out with the help of subscribers. The prospectus includes different segments such as financial documents, future plans of the company, potential risks in the market and the expected price range for the shares.
Often, underwriters go on roadshows to attract potential institutional investors after creating the diversionary prospectus.
Step 3: Approval by the Autorité des Marchés Financiers such as the AMF or the SEC
The prospectus is presented to the financial markets authority. If the authority is satisfied, it gives the green light to the listing process.
In addition, it also indicates the date and time of the IPO .
But if the financial markets authority is not satisfied, it requests that changes be made before the prospectus can be communicated to public investors.
Step 4: Subscription for Shares
Once all the formalities have been completed, the company makes the shares available to investors. This provision is made on the dates indicated in the prospectus.
Investors who wish to apply for shares must complete and submit the IPO application form.
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