This December 12, 2021 CNBC article focuses on the common-sense approach we take to investment research and the objective math we use to show the absurdity of many recent IPO valuations.
Figure 1 shows that the IPO warnings featured by CNBC have outperformed as shorts and underperformed the S&P 500 by an average of 16%. Get all of our IPO research here.
Given that it is unbelievably rare in the history of the world for companies to achieve the high profit growth expectations embedded in the current valuations of these IPOs and our Focus List: Short stocks, we continue to believe that investors should not own them.
Figure 1: Performance of IPOs Mentioned in CNBC Article: Through 12/13/21[1]
| Ticker | Company | Publish Date | Performance | S&P 500 Performance | Vs. S&P 500 |
| TRVG | Trivago | 12/15/16 | -88% | 58% | -146%* |
| EB | Eventbrite Inc. | 9/24/18 | -55% | 60% | -115% |
| BOX | Box, Inc. | 1/27/15 | 21% | 130% | -109% |
| WE | WeWork | 8/19/19 | -100% | n/a | -100%** |
| SNAP | Snap Inc. | 2/6/17 | -65% | 14% | -79%* |
| UBER | Uber Technologies Inc. | 4/22/19 | -15% | 61% | -75% |
| BMBL | Bumble Inc. | 2/10/21 | -54% | 19% | -73% |
| DBX | Dropbox Inc. | 3/19/18 | 15% | 72% | -57% |
| HOOD | Robinhood Markets Inc. | 7/19/21 | -48% | 6% | -54% |
| DIDI | Didi Global Inc. | 6/21/21 | -49% | 4% | -53%* |
| SQSP | Squarespace Inc. | 5/17/21 | -38% | 14% | -52% |
| COIN | Coinbase Global Inc. | 3/5/21 | -34% | 13% | -47% |
| BIRD | Allbirds Inc. | 9/27/21 | -39% | 5% | -44% |
| SG | Sweetgreen Inc. | 11/15/21 | -43% | -1% | -43% |
| DASH | DoorDash, Inc. | 11/23/20 | -15% | 26% | -41% |
| GTLB | Gitlab Inc. | 10/8/21 | -23% | 6% | -29% |
| WRBY | Warby Parker | 9/13/21 | -16% | 4% | -20% |
| RIVN | Rivian Automotive | 10/25/21 | 11% | 0% | 11% |
| DOMO | Domo Inc. | 6/25/18 | 104% | 64% | 40% |
| BJ | BJ’s Wholesale Club | 6/26/18 | 213% | 71% | 142% |
| AVLR | Avalara Inc. | 6/14/18 | 309% | 68% | 241% |
| YETI | Yeti Holdings | 10/24/18 | 422% | 75% | 347% |
| Average | 19% | 37% | -16% |
Sources: New Constructs, LLC and company filings.
*Performance measured through date position was closed. TRVG closed 11/16/20. We closed our SNAP position on 2/8/19. We closed DIDI on 8/18/21.
**WeWork cancelled its IPO in late 2018.
All of our research leverages more reliable fundamental data[2] that overcomes flaws with legacy fundamental datasets to provide a more informed view of the fundamentals of companies and a new source of alpha.
Our stock picks, including those on IPOs, regularly rank #1, most recently in SumZero’s December 2021 rankings. See other stock picking accolades.
This article originally published on December 13, 2021.
Disclosure: David Trainer, Kyle Guske II, and Matt Shuler receive no compensation to write about any specific stock, sector, style, or theme.
Follow us on Twitter, Facebook, LinkedIn, and StockTwits for real-time alerts on all our research.
[1] Performance of IPOs for which we published a report prior to the company’s IPO is tracked from the opening price for each IPO’s first trading day.
[2] Three independent studies prove the superiority of our data, models, and ratings. Learn more here.