For Immediate Release
Chicago, IL – June 11, 2020 – Today, Zacks Investment Ideas feature highlights Features: IPO, Warner Music Group WMG and ZoomInfo ZI.
Caution: The Red-Hot IPO Market Could Burn You
The 2020 IPO market is red hot this month, as retail investors take on an aggressive investing approach. There seems to be endless risk-on appetite driven by young trader/investors who want to get on the ground floor of hot new stocks as the wind in blue chips’ sails seems to be dying down.
The Renaissance IPO ETF has surged 23% year-to-date, pushing the innovation-driven ETF to all-time highs. This ETF’s holdings are primarily made up of 2018 and 2019 IPOs, but we are beginning to see more 2020 IPOs join the ranks as the fund phases out 2018 debuted stocks.
Enterprises are seeing this as an opportunistic time to raise public funding, with investors hunting for fresh new stocks. Nikola Motor (NKLA) is one such example, although they entered the market in a very peculiar way. The stock had initially traded under VectorIQ, but Nikola merged with the firm on June 2nd and debuted the new NKLA shares on June 4th. Since the merger, the shares have skyrocketed over 150%.
Nikola is an electric vehicle company that is yet to sell a single vehicle and has made exactly $0 in sales. Still, highly speculative investors & traders have pushed this enterprise to a valuation of roughly $29 billion. This puts the company’s value at the same level