I Wouldn’t Touch These IPOs with a 10-Foot Pole

It’s hard to imagine something like milk moving the stock market.

But that’s exactly what happened last December when Starbucks announced it would start offering oat milk as a dairy alternative, shooting the stock up 3% in just 24 hours.

And now, it’s about to happen again.

See, Starbucks exclusively used the company Oatly as their oat milk provider. And after just one month of Oatly in stores, the coffee chain started running out – demand was that high.

And now, Oatly is going public.

This Thursday, May 20, Oatly will list on the Nasdaq exchange under the ticker OTLY, seeking a $10 million valuation.

The vegan company already has backers and investors like Oprah, Jay Z, and the former Starbucks CEO. And now, it’s heading to the public, looking for the cash of people like you, expecting to raise $1.65 billion.

But look – I’m just using milk as a way to talk about IPOs. And I’ve got one thing to say:

Don’t do it.

This year’s IPOs haven’t been, well, kind to companies. And that means they haven’t been kind to those companies’ investors either.

Take Coinbase Global (NASDAQ:COIN) – one of the most hotly-anticipated IPOs of the year.

Cryptocurrency was all anyone was talking about. Average Joes had made hundreds, thousands, millions of dollars on the digital assets in a matter of months. Bitcoin was sitting at an all-time high.

And Coinbase, one of the most popular crypto exchange platform operators, was about to be the first of its kind to hit the public markets.

But the IPO crashed and burned. One week after COIN hit the Nasdaq, it had fallen 15%.

Today, it’s been about one month since the shares’ debut – and the stock sits almost 23% lower as I type, after an earnings miss on its first-ever report.

COIN isn’t special, either. Airbnb, Uber, Snowflake – all hot IPOs in the last couple of years that were nothing but disappointments.

Remember what I said about Cathie Wood? She dumped a ton of cash into Coinbase, and look at ARKK now.

You’re a part of Profit Takeover – that means now, you’re a trader. A trader who looks for relatively low-risk investments with high-reward potential. A trader who seeks out asymmetric returns.

And you know where you won’t find that? In IPOs.

So, here’s what I have to say: stay away from Oatly…

And Zip Recruiter…

And Squarespace…

And any other IPO that hits the public markets in the coming weeks. For now, at least.

Every trader knows that you need to wait and let a company shake itself out before you put your own cash in it.

And you’re a trader now – so that means you too.

But if you’re not putting your money in IPOs… where should you put it?

Well, that’s a question I’ll answer next week. Keep an eye on your inbox for your next asymmetric trade!

Coming soon…

Mark Sebastian

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