3 New IPO Stocks to Consider in December 2020

December’s launch of IPOs gives us three alluring, yet new, IPO stocks to consider. One has already demonstrated its two-month growth, while the other two stand to gain much value in the long haul. If you have children, you are almost certainly familiar with one rising gaming star.

Not to be confused with tricky ICOs, which have historically turned bogus more often than not, IPOs are initial public offerings. Those private tech companies that accrued a market cap of over $100 million provide an enticing investment opportunity by issuing publicly traded stocks at year’s end. This offers a rare chance for stock traders to get a head start, while the companies receive much-needed capital to realize their growth plans.

Some investors worry about where they’ll be able to buy new IPO stocks. Yet if they use any of the top stock trading apps, such as Robinhood for example, these investors will be sure to have access.

3 IPO Stocks to Consider as 2020 Concludes

As you would guess, the three top companies launching an IPO in December are nestled within the digital tech sector, which provides them with lean business models.

1. Roblox (NYSE:RBLX)

A gaming success story much like Sea Limited, Roblox is unique in its offering and aesthetics. This gaming developer studio provides not just a game but an entire gaming ecosystem. Encompassing a community of over two million developers, the Roblox gaming platform is family-friendly with its Lego-like style across its countless multiplayer 3D games. These can range from survival and theme parks to adventures and action role-playing games, all of which allow you to retain a consistent avatar once you get a Roblox account.

Here are is a tiny sample of Roblox’s most popular gaming experiences:

• Jailbreak
• Natural Disaster Survival
• Theme Park Tycoon 2
• Murder Mystery 2

Roblox aesthetics attract a young audience, aiming to be the new Minecraft. The stats certainly point in that direction, as Roblox has been experienced by 75% of children aged 9-12, according to the company. Consequently, the platform’s active daily user count is at 31.1 million, which ranks it one of the top online entertainment platforms under 18. 

Given the pool of millions of developers who keep creating new gaming scenarios, Roblox popularity is far from reaching its peak. Speaking of Roblox developers, how exactly do they make money? Its monetization system is simple:

• Roblox, the company, keeps updating the platform with free tools for devs.
• The devs don’t get paid by the company, but by in-game virtual currency – Robux – bought and spend by users.
• The more interesting the gaming scenario, the more popularity it will gain, which means that more people will spend Robux for in-game items. Then, the devs can exchange Robux for real-world money.

During 2020, Roblox bookings amassed to $1.2 billion, which marks a 171% increase compared to 2019. Likewise, during the 9-month period of 2020, its revenue jumped by 68% YoY, to $589 million. No doubt, the pandemic lockdowns helped its userbase rise by 82% in 2020, but its business model is fundamentally sound regardless. 

The company only has to keep updating its platform, while the developers are incentivized to create games to earn Robux. This is why Roblox is expected to have an impressive starting valuation of $8 billion on the New York Stock Exchange (NYSE) under “RBLX”.

2. FuboTV (NYSE:FUBO)

Powered by both subscriptions and advertisements, FuboTV is a sports-oriented streaming platform. Since its public listing on the NYSE in October, its shares rose by 169% from its near-penny stock range of $10 per share. One would think that new streaming companies would have a hard time to carve a niche among the other streaming giants, but FuboTV has a trick up its sleeve.

Unlike other sports-streaming companies that offer slim starting bundles, FuboTV’s basic bundle offers a collection of over 110 sports, starting at a $65 monthly subscription. These include all the major leagues: MLS, NBA, and NFL. Partly as a result of lockdowns and empty stadiums, FuboTV gained nearly half a million subscribers by the end of Q3 2020, which represents a 58% YoY increase. Its revenue climbed by 71% YoY, of which the majority comprised of subscription revenue. As for FuboTV’s advertisement revenue, it jumped by 153% compared to 2019.

To continue its upward momentum, FuboTV acquired an online gambling platform Balto Sports, which perfectly complements the needs of its audience, as the government’s response to coronavirus culled sport-betting bars as well. 

3. Airbnb (NYSE:ABNB)

Although the government’s response to covid collapsed Airbnb’s bookings, the rest of the hospitality industry proved to be less resilient. Airbnb model has been disrupting the traditional rental market for years, as a mediator between private rentals and online seekers of rating-based accommodation. Airbnb’s valuation plummeted to $18 billion in April, which is quite severe compared to its peak funding round of $31 billion in 2017. 

However, by providing an online platform for users to find cheaper but equally comfortable accommodations, Airbnb is not going anywhere. Moreover, it offers renters unique flexibility to plug their unused lodgings into the Airbnb rental ecosystem. For that plugin, Airbnb charges the hosts a 3% service fee, which constitutes the bulk of its revenue stream.

This means the company has a wide margin for growth, as it needs less marketing and minuscule mediator operating costs. Just like it happened with PayPal, once entrenched, it is extremely difficult to oust Airbnb from its leading rental position in both the US and Europe. For its IPO launch, Airbnb aims at a $42 billion valuation, with the potential to raise up to $3 billion this Thursday.

From Valve and Epic Games to Sea Limited and Roblox, more and more gaming studios turn into giant multi-purpose platforms. Which one is your favorite?

Disclosure: Tim Fries has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing of this article. Please consult our website policy for more information.