After a buzzing 2021 with plenty of hype around the prospect of just about every IPO announced, 2022 is hoping to recapture some of that investment excitement.
I’m going to explain why IPOs are important to investors, reveal the top 10 rumoured launches simmering away for later this year and explore ways you can invest. Read on to find out this year’s hottest prospects!
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What is an IPO and why are they important?
An IPO (or initial public offering) is a way for a business to raise money. But it’s also much more than that.
Often referred to as ‘going public’ or a ‘new issue’, it’s the first time regular investors like you and I have the opportunity to buy shares in what was previously a private firm. Buying stock in a private company is a tough process and often reserved for those with deep pockets and industry ties!
In order to become public, these large companies must open up their books and let us take a peek at their financial statements.
This is done to help ensure that everything they do is above board, providing some level of protection to investors. Usually, stocks will reach a fairly decent size before going public, and there are plenty of big-name companies waiting for the right time. All the while, investors on the sidelines are chomping at the bit, waiting to get hold of shares.
The release day of an IPO can sometimes lead to heavy volatility and a trading frenzy. So, although this is often not the best time to invest, it’s still an exciting day for the market and for investors!
What are the most promising IPO launch rumours?
Here’s a rundown of ten hotly anticipated launches that Freetrade thinks are likely to send investors wild in 2022:
UK IPOs
These are the British firms tipped to pop on the LSE:
| Company | Sector |
| BrewDog | Food & Beverage |
| Jaguar Land Rover | Transport |
| Starling | Banking & Finance |
| Monzo | Banking & Finance |
Tech IPOs
Next, we have the technology stocks looking to be the next big thing:
| Company | Sector |
| Discord | Communications |
| Databricks | Cloud Computing |
| Communications | |
| Stripe | Payments & Finance |
US IPOs
Finally, we have some up and coming American hotshots:
| Company | Sector |
| Instacart | Food Delivery |
| Impossible Foods | Food & Beverage |
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How do you invest in companies that go public?
How you can invest will depend largely on what stock exchange the shares are listed on. Once you know where the stock is being listed, you’ll need a share dealing account that gives you access to that specific exchange, allowing you to buy shares.
Some brokerage accounts, such as IG and Hargreaves Lansdown, give you the ability to set up IPO alerts. The release dates are usually announced on quite short notice, so these alerts are a good way to make sure you stay informed.
However, investing on the IPO day itself can lead to mixed results. On one hand, you might get in relatively early to a firm that will go on to do big things. On the other, plenty of insiders will be offloading shares, hoping to capitalise on the buzz and hype.
So, always consider any potential investment carefully before jumping in. It might be a great stock, but it’s important to remember that there’s still risk involved and you may get out less than you put in.
