Download App

Log in to access Online Inquiry

IPO Insights

Views 24812022.08.03

Are all IPOs worth investing in?

Chapter 6, October 28

What's new?

Shares of $MediaAlpha Inc(MAX.US)$ soared in their market debut Wednesday on October 28, 2020.


MediaAlpha shares opened at $23 and ended trading at $31.15, a 64% jump.

MediaAlpha collected $175.8 million late Tuesday, after selling 9.25 million shares at $19 each, the midpoint of its $18 to $20 price range.

MediaAlpha CEO Steve Yi said in an interview,

I’m thrilled with the IPO and what it means for our team members. 

It’s an opportunity to reward their commitment, to recognize their hard work. It’s a milestone. Also, it’s the start of an exciting new phase and the start of our journey.

MediaAlpha uses artificial intelligence and data science to help insurance carriers find customers online. The company provides a digital-advertising platform to draw customers to insurance carriers.

However, another insurance company $Root Inc(ROOT.US)$ didn’t fare as well. Its much larger IPO initially rose 9%, then dropped below its $27 price before rebounding to end where it started.

Are all IPOs worth investing in?

Apparently, not all investors should invest in IPOs on their debut days.

When investing in an IPO, it is important to understand that it is akin to investing in the growth of a small company, a sunrise industry, a large corporate opening up to retail investors and being a part of its growth journey. 

Hence, it is important to take a good look at the company, the nature of business, its track record, management, competition, and its business outlook. A company in the growth stage may offer more potential for long-term capital appreciation. 

The valuation and the attractiveness of the IPO price band can be analyzed by reviewing the financials of the company, referring to research reports or by comparing with the valuation ratios of similar companies. This will give you a holistic view of the company’s prospects and help him understand if the IPO is overpriced, under-priced or fairly-priced.

You could check a newly-listed company's prospectus under the News, Announcement section on moomoo:


Source: moomoo

Only companies with big growth potentials and reasonable valuation are worth investing in.

Source: Barron's, economictimes

Trade like a pro with moomoo

Get free stock and start your professional trading today

Terms and conditions apply right-arrow
This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal.Moomoo is a financial information and trading app offered by Moomoo Techonologies Inc.In the U.S., investment products and services available through the moomoo app are offered by Moomoo Financial Inc., a broker-dealer registered with the U.S. Securities and Exchange Commission (SEC) and a member of Financial Industry Regulatory Authority (FINRA)/Securities Investor Protection Corporation (SIPC).In Singapore, investment products and services available through the moomoo app are offered through Moomoo Financial Singapore Pte. Ltd. ("Moomoo Financial SG") regulated by the Monetary Authority of Singapore (MAS). Moomoo Financial SG is a Capital Markets Services Licence (License No. CMS101000) holder with the Exempt Financial Adviser Status. This advertisement has not been reviewed by the Monetary Authority of Singapore.In Australia, financial products and services available through the moomoo app are provided by Futu Securities (Australia) Ltd, an Australian Financial Services Licensee (AFSL No. 224663) regulated by the Australian Securities and Investment Commission (ASIC). Please read and understand our Financial Services Guide, Terms and Conditions, Privacy Policy and other disclosure documents which are available on our websites and Moomoo Technologies Inc., Moomoo Financial Inc., Moomoo Financial Singapore Pte. Ltd. and Futu Securities (Australia) Ltd are affiliated companies.