The Wrap: The IPO edition

This week we uncover the original ‘instagram’, bite into a meaty listing and hail a Lyft to the opening bell as we look forward to the most anticipated IPOs of 2019. So tune out of Spotify and jump off Dropbox, because they’re so 2018.

7 most popular IPOs on Stake

1. Tilray Inc (-2.40% for the week)
2. NIO Inc (-0.89%)
3. Spotify (+0.76%)
4. iQIYI Inc (+7.84%)
5. Dropbox (+1.31%)
6. Tencent Music (+6.41%)
7. Aurora Cannabis (+4.1%)

Sneak peak: 2019 IPOs

Delivering weed…and maybe returns

Before 2010, if you mentioned ‘instagram’, people would have thought you were referring to a delivery drug service not a social networking platform.

But fast forward to 2019 and the original ‘insta-gram’ is set to IPO. Eaze, a company providing on-demand delivery of cannabis in California, is rumoured to be IPOing. While the SEC filing (a prerequisite for listing) is apparently still in the works, the IPO smoke signals have been puffing from San Francisco for the last 6 months.

Eaze launched in 2014, to deliver medical marijuana to those who could not make it to a dispensary due to poor health or distance. However, in 2016, Eaze’s addressable market exploded, when California’s residents voted to legalise recreational weed courtesy of Prop 64 (aka the Adult Use of Marijuana Act), giving them potential access to nearly every adult resident in California.

No doubt this IPO is going to be popular with the Stake community, who made “Weed” one of the most traded categories in 2018 and Aurora (ACB) and Tilray (TLRY) two of the hottest IPOs of 2018.

Fasten your seatbelt

For those not overly familiar with Lyft, it’s Uber’s biggest competitor in the US. Lyft, much like Uber is a ride hailing service, but positions itself as the ‘friendlier’ alternative. Fittingly, its brand promise is ‘your friend with a car’. We’d rather a friend with a boat or a ute, but it seems to have worked for Logan Green and John Zimmer, Lyft’s founders.

Other than moving people, Uber and Lyft have one thing in common — an ability to raise money. Lyft has raised ~$5bn since 2012 while Uber has somewhere closer to $25bn in invested capital.

Lyft, which was last valued at $15 big ones (in comparison to Uber’s $100bn) filed with the SEC in late 2018 for a 2019 IPO, putting it in the driver’s seat for more investor capital. There is no doubt it’s going to be one of the most watched IPOs of the year, as its success could determine Uber’s next move.

A meaty proposition

Beyond Meat is exactly that. A plant based producer of meat substitutes is one of the most interesting companies to IPO this year, and of the 3 companies discussed in this week’s wrap, the most likely to IPO first. While the exact listing data has not been set, a placeholder amount of $100m (this can change) is due to be raised when the company goes public.

Founded by Ethan Brown in 2009, Beyond Meat filed its application to the SEC on 16 November 2018 to list on the Nasdaq under the banner BYND. With coverage across North America courtesy of distribution through Whole Foods since 2013, and via restaurant chains TGIF, Carl’s Jr and A&W Canada.

BYND has cult-like status after it won PETA company of the year in 2013 and through support of some famous backers including Leonardo DiCaprio and Bill Gates. Mr William Gates commented on his personal blog that he “couldn’t tell the difference between Beyond Meat and real chicken”. With his capital at ‘Stake’, no doubt he’ll be following the IPO as closely as us.

Top buy | New Gold Inc (NGD) +13%

This trader struck some new gold with a well-timed entry into NGD, a mining company focusing on gold, silver and copper across the Americas and Australia. With a $1.03 entry and a sell at $1.16, our trader took a hearty 12.6% nugget from the market in less than a week. This shiny stock has moved upwards of 50% since the beginning the year.

Top sell | Orchids Paper Products (TIS) -22.86%

One Stake customer saved themselves from a 20.63% papercut, with a timely sell on TIS, the Orchids Paper Products Company which makes paper and tissues. Jumping out of the stock at $1.26 after it dropped from $1.40, may have felt painful at the time, but the ultimate drop-down to 99c wiped those tears away and also won this trader the top sell for this week.

5 stocks rising like your appetite for a burger at lunch (meat or otherwise)

1. PG&E Corporation (+62.79%)
2. Synergy Pharmaceuticals (+48.58%)
3. Pier 1 Imports Inc (+30.37%)
4. Sunlands Online Education Group (+27.51%)
5. Bristow Group Inc (+23.74%)

5 stocks going down like the speed of your commute with school starting

1. Seadrill Partners (-36.72%)
2. Maiden Holdings Limited (-26.42%)
3. Lexicon Pharmaceuticals Inc (-25.17%)
4. Frontier Communications Corporation (-24.43%)
5. Babcock & Wilcox Enterprises Inc (-22.89%)