It’s been an interesting week, to say the least. Investing and market trends have been spotlighted a great deal in the past week because of recent news involving GameStop (NYSE: GME). A company that was on the verge of going bankrupt is now on everyone’s radar. Whether you’re an investor or not, it’s been hard not to hear about GameStop and the investing drama surrounding it. As I write this, GameStop stock has opened the day at $316.25 per share. I don’t want to get into too much detail since a colleague of mine, Jason Williams, wrote an excellent article about the drama surrounding GameStop and the Reddit board (r/wallstreetbets) behind this recent uptick. I just thought it would be worth noting to direct you to an article that focuses more on it.
Today, I want to talk about my favorite topic to discuss with all of you — the IPO market. Last week, I spoke briefly about how we are still experiencing a SPAC surge — that’s still the case this week. Though there are a few SPACs set to IPO this week, it appears IPOs from non-blank check companies will dominate. I want to focus on three public offerings that might interest you. Keep an eye out for these market debuts.
1. ON24
ON24 is based in San Francisco, California, and offers online video communications and related sales and marketing support technologies to businesses throughout the world. As you know, a lot of work and interaction has shifted to mostly virtual because of the COVID-19 pandemic. ON24 provides a cloud-based digital experience platform to its business clients, offering online webinar software, virtual events, multimedia content, behavioral insights, and a third-party app ecosystem. So much is virtual right now and that has increased the demand for offerings like those of ON24. According to the company, as of September 30, 2020, it had more than 1,900 customers in over 40 countries. The high demand for these types of services during the pandemic could continue in a post-pandemic world. Even as far back as 2018, this market was forecasted to grow.
A 2018 market research report by Global Market Insights indicated that the global market for video conferencing is expected to exceed $20 billion by 2024, which represents a forecast CAGR of 10%. Many businesses have stated that they will be sticking with remote work even after the pandemic — a sign that demand for video conferencing and the types of services that ON24 offers will continue. The company is set to go public this Wednesday, February 3 on the NYSE under the ticker symbol “ONTF.” Its underwriters include Goldman Sachs, JPMorgan, and KeyBanc Capital Markets. As of right now, its target price range is $45–$50 per share. Zoom Video Communications (NASDAQ: ZM) provides video conferencing for businesses and personal use, so this IPO from ON24 could be comparable.
2. loanDepot
LoanDepot is based in Foothill Ranch, California, and has developed a digital-first platform that allows for origination, processing, underwriting, closing, and servicing for residential mortgages in the U.S. Its main mission is to provide these otherwise complicated and time-consuming services in a more efficient manner. Right now, interest rates are at record lows, and loanDepot has joined the wave of other mortgage leaders who aim to benefit from these rates. The company is one of America’s largest mortgage lenders. In loanDepot’s S-1, it reported that its market share is growing from just over 1% in 2014 to 2.6% as of September 30, 2020. The company earned $3.4 billion in revenue in the 12 months that ended on September 30, 2020. While we are seeing an upward trend in this market because of the COVID-19 pandemic and lower interest rates, that demand could fizzle when the economy starts to rebound and interest rates start to increase.
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Back in September, Bloomberg reported that loanDepot was eyeing an IPO that would see the company valued between $12 billion and $15 billion. The company is set to go public this Thursday, February 4 on the NYSE under the ticker symbol “LDI.” Its underwriters include Goldman Sachs, Bank of America Securities, Credit Suisse, Morgan Stanley, Barclays, Citigroup, Jefferies, and UBS Investment Bank. As of right now, it has a target price range of $19–$21 per share. There is growing investor interest in this IPO, so I believe that its shares will most likely be on the high end or even above that target price range.
3. Lucira Health
Just like the other two IPOs mentioned in this article, Lucira Health is also based in California. It has developed a line of convenient testing kits, and its lead kit is being developed for the detection of the COVID-19 virus. The company recently received emergency marketing approval from the FDA for its COVID-19 test device. This is a prescription at-home self-collected nasal swab for individuals aged 14 and older who are suspected of having COVID-19. The kit will be able to test for the presence of the COVID-19 virus within 30 minutes of sample collection. Right now, Lucira is ramping up its manufacturing capacity for its COVID-19 test kit, and it believes that it can scale its operations significantly in the second half of 2021. Obviously, the COVID-19 virus has provided many challenges to the U.S. health care system, and the availability of a kit like Lucira’s could be extremely beneficial to lighten the load that health care systems are faced with every day — especially since it can be performed at home and only takes 30 minutes to produce results. The company is set to go public this Friday, February 5 on the Nasdaq under the ticker symbol “LHDX.” Its underwriters include Bank of America Securities, William Blair, and LifeSci Capital. As of right now, it has a target price range of $15–$17 per share.
Keep an eye out for these IPOs and how they perform on their market debuts. For more information and news on upcoming IPOs, click here.
Until next time, Monica Savaglia Monica Savaglia is Wealth Daily’s IPO specialist. With passion and knowledge, she wants to open up the world of IPOs and their long-term potential to everyday investors. She does this through her newsletter IPO Authority, a one-stop resource for everything IPO. She also contributes regularly to the Wealth Daily e-letter. To learn more about Monica, click here.
