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Three IPOs to buy and the names coming soon
It seems more and more new entrants are lining up to join the stock market, enticed by the bumper gains chalked up by recent market debutants and growing investor appetite for new floats.
In this article we will discuss why you should take advantage of the opportunity to participate in the upcoming Deliveroo IPO, why newly US-listed gaming group Roblox is worth buying, and why you should get ready to invest in reviews and recommendations platform Trustpilot.
At the end of the article you can also find a full list of all the major upcoming IPOs in London, both rumoured and confirmed.
A constantly refreshed list of upcoming floats can also be found on the Shares website.
DELIVEROO: INVEST IN THE IPO OFFER
Takeaway platform Deliveroo is a rare example of a stock where retail investors are being given the chance to participate in an IPO and we think you should seize on this opportunity. We’ve written a separate article that contains all about the nuts and bolts of how to get involved, with the IPO expected to happen in early April.
Deliveroo operates in 12 different regions with more than 110,000 restaurant partners and 140,000 riders worldwide.
The takeaway market is highly competitive and includes Just Eat Takeaway (JET) which is investing heavily to gain market share.
We think there are several factors that make Deliveroo stand out. First it has heavyweight backing in the form of Amazon. The latter is a potential suitor for the business down the line.
It also differentiates itself somewhat from its rivals by virtue of its strong brand and a bias towards more premium restaurants and a more affluent customer base.
Deliveroo is at the forefront of running so-called ‘dark’ kitchens. These are often located in industrial estates that allow for high order volumes in partnered restaurants in high-density areas.
The company is also building a network for on-demand grocery delivery – partnering with major supermarkets and convenience stores including Co-op. This is less about rivalling the delivery of a weekly shop and more about those bits and bobs you would normally pick up at a corner shop or a mini supermarket.
Morningstar says: ‘Deliveroo presents the strongest upside potential from the on-demand opportunity in our European food delivery coverage list.’
The main risks are linked to regulation – either affecting the arrangements between Deliveroo and its gig-economy riders or its relationship with Amazon.
ROBLOX: BUY NOW AT $69.91
This kids’ gaming platform surged on its market debut on 10 March and we can see why. Back in the day we might have rushed to play with Lego bricks as children, now playing Roblox on a computer or tablet is top of the list for many under-12s.
The $40.6 billion company has upwards of 30 million players and the long-term opportunity justifies buying the US-listed shares at their current level.
Roblox is a platform where players can interact with each other through Lego-style avatars within various games.
It has been a beneficiary of lockdown with young people stuck indoors with little to do and few other ways of interacting with their friends.
Roblox made it possible for them to engage in virtual trips to theme parks, concerts and parties while chatting to their peers.
But anyone who thinks Roblox is a pandemic fad either doesn’t have kids or hasn’t been paying attention.
Roblox, which is free to play but offers lots of in-app purchases to enhance the experience, could eventually become part of the ‘metaverse’ – with people using the platform to interact in immersive virtual experiences on a grand scale.
It has a big responsibility to keep its users safe given their young age, either from potentially malicious players or inappropriate content.
Analysts forecast it will make $144.5 million pre-tax profit in 2021, rising to $251 million in 2022 and $325 million in 2023, according to Refinitiv.
TRUSTPILOT: GET READY TO BUY ON DAY ONE
Assuming a rumoured £1 billion valuation, business reviews platform Trustpilot is expected to be valued at around 10 times 2020 revenue when it joins the London stock market, likely to be in late March or April.
Given the growth potential we think it is worth buying at this level.
The acceleration in the e-commerce theme from the pandemic makes Trustpilot’s role increasingly important as people look to ensure the seller from whom they are buying is trustworthy. They also want to know what other customers thought of their experience, such the efficiency of delivery and how service issues were handled.
Newly profitable, the Danish firm offers its reviews to consumers for nothing and provides basic analysis to businesses for free.
But it upsells more detailed analytics to companies based on its wealth of data and charges for the use of Trustpilot reviews on
The inclusion of Trustpilot ratings on advertisements is seen as a ‘must-have’ and a five-star rating is a powerful marketing tool.
The targeted $50 million proceeds from the IPO will be used to pay down debt and fund growth.