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Initial public offerings (IPO) are very exciting times. Insiders have the opportunity to see how a company they have grown alongside has grown into a significant institution that the public can also participate in. Potential shareholders have the opportunity to jump in on day one and be a part of what they hope could be a tremendous growth story.
However, IPOs are inherently risky. That’s because the market hasn’t had a chance to assess the value of this newly listed company. It’s common for many high-flying tech stocks to soar after an IPO when the economy is perfect. However, a company that goes public at the wrong time or at the wrong valuation could see its share price plummet. How have some IPOs fared recently?
This learning platform could recover
i will teach (TSX:DCBO) is one of the few IPOs that I really wanted to be a part of. This company offers businesses a cloud-based and AI-powered e-learning platform. The platform makes it easier for managers to assign, monitor, and change employee training programs. Since its IPO, Docebo has managed to attract many notable clients, including such as Amazon. That speaks volumes about its quality.
At its peak, Docebo stock gained more than 710% from its IPO price. Today, however, investors expect the stock to lose about 60% from its peak valuation. It’s not all bad news, however. Docebo stock is currently trading about 230% above its IPO price and more than 30% above its 2022 lows. I believe the eLearning industry could grow in the future as companies continue to digitize many aspects of their business. If Docebo keeps innovating, investors could see big growth from here.
This stock has fallen significantly
Speed of Light (TSX:LSPD) was once touted as next Shopify. The two companies share similarities due to their respective presences in the retail industry. The core of Lightspeed’s business focuses on providing point-of-sale and related services to small and medium-sized retailers. For a long time it seemed like the only place to buy Lightspeed stock was up.
Unfortunately, a brief report triggered the start of a massive decline in Lightspeed stock. Since the publication of this report, Lightspeed stock has fallen more than 80%. Dax Dasilva, Lightspeed’s founder, has since stepped down as Chief Executive Officer. While there’s no denying that Lightspeed could be a big winner going forward, the company doesn’t tick all the boxes I look for in a growth stock. This could be a great stock to watch, but not one to buy today in my opinion.
Another short report victim
Unfortunately, short report attacks don’t stop at Lightspeed. nausea (TSX:NVEI), another promising growth stock, fell victim to yet another news brief. Although many in the financial industry supported Nuvei following the publication of this report, the stock didn’t have a chance to recover. As of this writing, Nuvei is about 80% below its all-time high and more than 17% below its IPO close.
Nuvei is a company that enables merchants to complete online, mobile, in-person and unattended transactions. Given the breadth of its platform, I believe the company has a bright future ahead of it. Unfortunately, there will continue to be difficult times in the near term as the economy continues to recover from a difficult environment. This is another stock that might be worth considering, but I don’t think investors should get too excited just yet.
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