Airbnb’s (NASDAQ:ABNB) IPO was one of the top tech stories of 2020. More than doubling the minute it hit the NASDAQ, it made early investors wealthy. Institutional buyers who got in at the offering price paid just $68 per share for ABNB. On its first day of trading, ABNB opened at $146. Institutional buyers who sold early realized a cool 114% return.
Alas, it was a different story for retail investors. If you’d bought on the first day of trading, at the $144 closing price, you’d only have seen your shares jump 1.62% in a week. That’s assuming you didn’t panic sell in the initial crash that sent the shares as low as $123.
When you buy “IPOs” as a retail investor, you don’t actually get the offering price. Instead, you get whatever price is offered by sellers on the open market. For this reason, IPOs typically don’t perform as well for individual investors as for early, institutional buyers.
That doesn’t mean you can’t profit by buying recent IPOs, though. There are actually plenty of 2020 IPOs that have done well for investors who’d bought on the first day of stock market trading. In this article, I’ll be exploring one Canadian tech stock whose IPO beat Airbnb’s in the first week of trading.
Lightspeed POS Lightspeed POS (TSX:LSPD)(NYSE:LSPD) is a Canadian tech stock that went public in 2019. In its first week of trading, it rose 15.3%. That is, the price increase from the closing price on the first day of trading to the last day of trading was 15.3%. Over the same number of days, ABNB gained just 1.62%. So, for retail investors at least, LSPD had a better first week than ABNB did.
Why LSPD outperformed the Airbnb IPO On the surface, it might seem strange that Lightspeed’s first week would be better than Airbnb’s. The former is a company nobody has ever heard of, while the latter is the most talked about tech stock of 2020. Where did all this interest in Lightspeed even come from?
There are a few possible explanations:
The post This Canadian Stock’s IPO Did Better Than Airbnb (NASDAQ:ABNB) appeared first on The Motley Fool Canada.
Fool contributor Andrew Button has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify. The Motley Fool owns shares of Lightspeed POS Inc.
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