Believe it or not, things are about to get real crazy in the IPO market.
Despite the aggressive selling we’ve been seeing in the Nasdaq, a slew of tech companies are about to go public.
I’m talking about tech companies that have seen some explosive revenue growth in the past year.
Sumo Logic +50%
Why are so many new tech stocks about to go public?
First and foremost, the pandemic has been fueling a shift toward cloud computing, which allows people to work, study, and transact online.
It’s no wonder that some already public cloud-based companies have reported earnings that exceeded expectations.
That includes Workday (WDAY), Box (BOX), Salesforce (CRM), and Intuit (INTU).
But also, it’s really only a matter of time.
“Unicorns” have been a less rare sighting as of late.
As compared to the 2,000 companies trading on the Nasdaq and NYSE with valuations over $1B, there are 490 such companies that are still privately held.
I’m expecting some potentially huge debuts from a number of these coming tech IPO, so don’t be surprised if I’m alerting my green light signal a lot next week.
I want to share the company profile and trading potential I’m seeing in a few of them.
Undoubtedly the most highly anticipated of the bunch, Snowflake has even convinced Warren Buffett to use his Berkshire Hathaway cash pile to get a stake in it.
He plans to buy $250 million worth of Snowflakes shares, along with Salesforce which anticipates buying the same amount.
That’s all just part of the $2.7 billion that the company hopes to raise in the IPO.
Snowflake is a cloud-based data management company, which helps companies analyze data.
That includes Capital One, which ushers in 11% of Snowflakes revenues.
While Snowflake has been losing money, it’s more recent quarter sales growth far outpaced that of its rival, Datadog (DDOG).
Other IPOs similar to Snowflake, including MongoDB (MDB), have rewarded investors this year.
Snowflake also has strong leadership. It’s current CEO, Frank Slootman, has successfully grown other private companies in the past.
Sumo Logic (SUMO)
Another company that’s playing into the digital transformation trend, Sumo Logic provides data and security analytics solutions to various sized companies.
Large data companies like Sumo analyze enormous pools of information that are derived from a variety of sources.
That includes web searches, social media, and financial records, among other things.
But they’re not just like any security and data analytics company.
Sumo Logic is the pioneer of what’s called “continuous intelligence,” which is a new category of software.
This software allows organizations of various sizes to deal with new challenges and opportunities presented by digital transformation, modern applications, and cloud computing.
Sumo Logic believes that it’s addressable market is $55B.
They plan on raising $310 million in the IPO.
This company’s title may be a sanskrit word for yoga posture, but it does quite the opposite of making a person sweat.
It facilitates enterprise collaboration and workflow management software that’s being used around the world.
Asana allows users to prioritize their day across all of their apps.
It allows organizations to manage projects more effectively, increase productivity, utilize calendars, and collaborate across remote teams.
Much like Snowflake and Sumo Logic, Asana has been burning through cash but revenues have been growing very quickly.
This growth is attributed to the increased use of mobile devices in mobile workforces and the increased use of social networking websites.
Asana currently has a number of competitors, including Slack (WORK), Trello, Monday.com, Atlassian (TEAM), Smartsheet (SMAR), Wrike, Microsoft (MSFT), and Airtable.
However, the demand for enterprise collaboration has been growing steadily throughout the years.
By 2021, it’s expected to hit $48.1B.
Receive My IPO “Green Lights” Next Week
This week’s abbreviated holiday week may have kept things pretty quiet on the IPO front, but next week is a whole different story.
I’ll have these tech IPOs on my radar over the coming week, and I will alert my “green light” signal if I decide to make some potentially profitable entries.
I’ll be sending out an IPO video alert on Sunday as well an email alert on Monday with further details on which of these IPOs I’m looking to enter.