Initial public offerings (IPO) are very exciting times. For insiders, they have the chance to see a company theyâve grown alongside become a major institution, available to the public to also become a part of. Prospective shareholders have the opportunity to get in on day one and become a part of what they hope could be a tremendous growth story.
However, IPOs are inherently risky. Thatâs because the market hasnât had a chance to assess the value of this newly listed company. Itâs common for many high-flying tech stocks to skyrocket after an IPO, given the perfect economy. However, a company that IPOs at the wrong time or at the wrong valuation could see its shares plummet. With that said, how have some recent IPOs fared?
This learning platform could be rebounding
Docebo (TSX:DCBO) is one of the few IPOs that I really wanted to jump into. This company provides a cloud-based and AI-powered eLearning platform to enterprises. Using its platform, managers can assign, monitor, and modify employee training programs more easily. Since its IPO, Docebo has managed to attract many big-name customers, including the likes of Amazon. That speaks volumes about its quality.
At its peak, Docebo stock gained more than 710% from its IPO price. However, today, investors are looking at a loss of about 60% from that peak valuation. Itâs not all bad news, however. Docebo stock currently trades about 230% greater than its IPO price and more than 30% higher than its 2022 lows. I believe the eLearning industry could grow in the future, as enterprises continue to digitize many aspects of their business. If Docebo continues to innovate, investors could see major growth from here.
This stock has fallen a significant amount
Lightspeed (TSX:LSPD) was once touted as the next Shopify. The two companies draw similarities because of their respective presences in the retail industry. The core of Lightspeedâs business focuses on providing point-of-sale and related services to small- and medium-sized retailers. For a long time, it seemed like the only place to go for Lightspeed stock was up.
Unfortunately, a short report sparked the beginning of a massive downturn in Lightspeed stock. Since that report was published, Lightspeed stock has fallen more than 80%. Since then, Dax Dasilva, Lightspeedâs founder, has stepped aside as its chief executive officer. Although thereâs no denying that Lightspeed could be a major winner in the future, the company doesnât check all of the boxes Iâm looking for in a growth stock. This could be a great stock to watch but not one to jump into today, in my opinion.
Another short report victim
Unfortunately, the short report attacks donât stop with Lightspeed. Nuvei (TSX:NVEI), another promising growth stock, was a victim of another short report. Although many in the financial industry supported Nuvei after the release of that report, the stock hasnât had a chance to recover. As of writing, Nuvei sits about 80% lower than its all-time high and more than 17% lower than its closing IPO price.
Nuvei is a company that allows merchants to complete online, mobile, in-person, and unattended transactions. Because of the breadth of its platform, I believe that the company has a bright future ahead. Unfortunately, itâll continue to experience difficult times in the short term, as the economy continues to climb out of a difficult environment. This is another stock that may be worth consideration, but I donât think investors should get too excited just yet.
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* Returns as of 12/13/22
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Foolâs board of directors. Fool contributor Jed Lloren has positions in Docebo and Shopify. The Motley Fool has positions in and recommends Nuvei and Shopify. The Motley Fool recommends Amazon.com, Docebo, and Lightspeed Commerce. The Motley Fool has a disclosure policy.