The Shocking Truth About IPOs


For years, initial public offerings performed poorly. But that seems to be changing right before our eyes.

Several companies have ripped higher since going public in the last few months. Technology has dominated the trend, including some prominent names from China.

Today’s big gainer is ZScaler (ZS), a provider of cloud-computing security services for a wide range of industries. It went public on March 15 for $16, which was already above the top of its range. Now it’s more than doubled to over $37 after its first earnings report crushed estimates. Analysts loved the strong margins, describing the company as a leader in a market that’s just getting started.

Yesterday’s standout was another cloud player, Pivotal Software (PVTL). It ripped higher after simply announcing its appearance at a conference on June 13. (Earnings are due on June 12, as well.) DocuSign (DOCU) and Smartsheet (SMAR), whose products let users collaborate remotely, have also shot higher in the last month.

Then you have the Chinese players:

  • Huya (HUYA) is a video-game company that went public for $12 on May 11. It’s more than doubled since then, but has paused since issuing results on Tuesday night.
  • Iqiyi (IQ), described as the Netflix (NFLX) of China, has almost doubled since the start of last month.
  • Bilibili (BILI) provides both games and video. It gapped higher on the heels of its first earnings report on May 14 and is up more than 40 percent from its March 28 IPO price.

In conclusion, sentiment seems to be changing since the days when high-profile companies like Facebook (FB), Twitter (TWTR) and FireEye (FEYE) languished after going public. And, this post isn’t an exhaustive list or intended as a recommendation. We wanted to highlight some of the bigger names getting attention as IPOs return to favor.

Do you want to invest in IPOs? TradeStation now offers access to initial public offerings through ClickIPO, an innovative mobile service that can be linked directly to your brokerage account. Existing clients can click here to get started.

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David Russell is Global Head of Market Strategy at TradeStation. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.