Three Ways to Get In on the Hottest IPOs

Amanda Heckman|March 20, 2021

Et tu, Coinbase?

Back in December, the major crypto exchange filed to go public.

But at the time, we didn’t know just HOW it would do it.

It was assumed the company would take the traditional initial public offering (IPO) route… but much like the industry it dominates, Coinbase is shaking things up.

It’s another crucial example of how our markets have changed… and how the old way of doing things is getting older by the minute.

As we’ve seen over the past year… IPOs are becoming a less attractive way to go public.

Simpler and more efficient options are taking over and creating huge opportunities for the average investor.

Better, Faster, Cheaper

In the case of Coinbase, the company has decided to go public via direct listing. It’s going around the red tape… cutting out the middlemen… and going straight to the public.

It’s faster… and cheaper… and protects the value of existing shares (a big win for employee shareholders).

Coinbase joins the gaming platform Roblox – the stuff of parents’ nightmares – and, likely, the popular grocery delivery app Instacart.

These companies are following the path of other tech disrupters such as Slack (up 20% since its public debut) and Spotify (up 70%), which also went public this way.

In a direct listing, existing shares are simply sold on the market… giving anyone with a brokerage account the chance to get in. The usual IPO players – such as institutional investors, who in typical IPOs get first dibs on newly created shares – have no advantage over you or me.

Score one for the average investor.

More Competition

But even direct listings have some fierce competition…

It’s no secret the Manward team is a big fan of the opportunities that come with special purpose acquisition companies, or SPACs.

Small companies can go public simply by merging with a “blank check” firm doing business as a SPAC.

As Andy told his Manward Letter readers:

The free market has done what it does best. It has found the most efficient way to sidestep ever-tightening regulation. In a world where IPOs are getting more expensive by the day and taking longer and longer to bring to life, SPACs are quickly becoming the path of choice by savvy startups. They’re a libertarian investor’s answer to a system mired with bureaucracy and red tape.

And here’s why you need to pay attention… The SPAC market made up more than half of all IPO transactions in 2020. That means it’s now the favored way of going public.

And again, the average investor has the same access to these IPOs as any big fund. Once shares hit the market… it’s fair game.

Score two.

An IPO for Everyone

And finally, the newest and perhaps most exciting way of going public comes to us from the blockchain, through security token offerings, or STOs.

Here’s how Andy describes them:

They’re very similar to traditional initial public offerings (IPOs) but are based on the blockchain. They offer investors real equity in real companies.

The industry tends to call them “everyman IPOs” since they are open to all investors… not just wealthy accredited investors.

A company can offer itself to the public by selling tokens. These tokens represent an ownership stake and are recorded on the blockchain.

The industry is still quite small – so far raising about $1 billion – but it’s growing. And like the other rabble-rousers I’ve mentioned today, STOs make the process of going public faster and cheaper… and more transparent.

They’re the ultimate revolutionaries.

If you’re still counting, that’s another point for average investors.

We’re seeing a revolution in how wealth is made in this country. No longer will the big-money institutions control who gets what… and no longer will exciting new businesses be hamstrung by the old way of doing things.

As we’ve said often… it’s an incredible time to be an investor. Get yourself into position to take advantage.