The Daily Telegraph - Saturday - Money
Gatecrash 2020’s top tech floats
Technology favourites such as TikTok and Deliveroo plan to list their shares on the stock market this year. Private investors won’t be invited to the party – but Sam Benstead has some tricks up his sleeve
Stock market flotations hit new heights in 2020, when a record 480 companies listed in America, and there are no signs of the pace letting up this year.
Investors scrambled to own a piece of well-known companies such as Airbnb and DoorDash, the leading US food delivery firm, and their shares often doubled in value when trading began.
This year the pipeline for initial public offerings is just as exciting, with a number of household names coming to market. Technology stocks dominate and as lockdowns persist around the globe their shares are primed to rise.
Buying into companies when they float, rather than when the shares have begun to trade on the open market, offers the biggest returns, but DIY investors are excluded from this because they lack the financial firepower. However, there are workarounds for savvy investors. Telegraph Money takes you through them.
DELIVEROO Deliveroo has become an essential service as its army of couriers delivers anything from Michelin- starred food to groceries and your favourite takeaway. The company is expected to launch what could be London’s biggest stock market flotation of 2021, which could value the firm at more than £5bn.
While the float is expected to be reserved for big financial institutions, there is a way for DIY investors to grab a piece of Deliveroo now: buying Amazon shares. The e-commerce giant led a £450m fundraising round for Deliveroo in 2019 and now owns 16pc of the firm. Deliveroo has lost money every year since 2013 but IG, a stockbroker, said it had now reached a scale where it could become profitable.
Will Shu, Deliveroo’s founder, said Covid-19 had advanced adoption of online food delivery services by two or three years.
‘Covid has advanced adoption of food delivery by two or three years’
STRIPE Stripe is probably the largest company that you have never heard of, but that could all change if it completes an eagerly anticipated flotation this year.
Founded by Irishman John Collison and run from California, Stripe provides the payment infrastructure for websites. The online shopping boom has been good for businesses and the firm is now valued at £75bn, based on fundraising last year. One investor in Stripe is British fund house Baillie Gifford, famous for its early investments in Alibaba, Tesla and Amazon.
Investors can own Stripe shares now by buying the £800m Baillie Gifford US Growth Trust, which holds the company as a 2.5pc position.
TRUSTPILOT Review website Trustpilot could be valued at £ 775m if it completes an expected listing this year.
Launched in 2007, the website now features 100 million reviews for more than 400,000 companies. Graeme Evans of Interactive Investor, the stockbroker, said the best way to own a stake was to buy shares in Draper Esprit.
The £ 912m investment trust has 12.5pc of its money in Trustpilot, which is its largest holding.
TIKTOK Video app TikTok boomed last year and has now been downloaded 1.5 billion times.
It is owned by the Chinese technology group ByteDance, which is planning a flotation of the company’s
American operations in a bid to appease White House concerns over national security. ByteDance said last year it would keep an 80pc stake in TikTok Global, which could become a £35bn company, with the remainder floated on the stock market.
DIY investors could grab a stake in ByteDance now by buying shares in the £2.1bn Fidelity China Special Situations investment trust, which invested £7.4m in ByteDance in 2018. The £18bn Scottish Mortgage investment trust, a favourite of retail investors, has 0.7pc of its money in ByteDance.