It has been a hell of a week for IPO's. We saw Door Dash (DASH) flu and Airbnb followed the next day with its own very impressive first-day move.
If you got IPO shares, count your blessings, and take your profits. The valuation on both is insane. Airbnb may someday be worth the price, but Door Dash will never be worth almost $70 billion. I suspect that 2020 will turn out to be the peak of revenues for Door Dash as a vaccine allows the world to normalize my mid-year 2021.
While those were the headlines, don't overlook that Hydrofarm Holdings (HYFM) jumped 159% in its debut yesterday. On Wednesday, software company C3.ai (AI) also saw shares more than double after its IPO closed.
According to Professor IPO Jay Ritter of the University of Florida, Airbnb was the 19th IPO to double on its first day this year. That's late 1990s action.
Don't forget SPACs. So far this year, we have seen 220 blank check companies go public. There were ten on Friday alone.
SPAC speculation so ramping up as well. I check in on the Redditt and Facebook SPAC groups, and I predict that epic amounts of money will be lost trading these things. No one has a clue what they are doing.
If you want to make money in SPACs, treat them as an arbitrage trade, not a growth opportunity.
They are not Pre-IPO shares that will grow your wealth to the sky. Most SPACs that have completed a deal are below the IPO price. There are a few well-publicized big gainers, but they are the exception, not the rule.
I have written about how to trade SPACs before. You can read it here.
Is it 1999 all over again?
I have no idea.
The vaccine news ...