The world of initial public offerings (IPOs) has seen several standout performers over the past year. CoreWeave, Inc. (NASDAQ:CRWV) saw a massive rally following its late March debut and Circle Internet Group, Inc. (NYSE:CRCL) burst onto the scene last week with its successful IPO.
But will they continue the upward trend and achieve sustained growth like Reddit, Inc. (NYSE:RDDT) and Astera Labs, Inc. (NASDAQ:ALAB) following their 2024 IPOs?
CRCL: Circle's IPO was priced at $31 and shares rocketed to $88 by the end of the first trading day. The stock climbed to over $107 the following day and marked a two-day surge of nearly 250%, setting a new record for IPOs raising $500 million or more since 1980, according to Fortune.
Circle shares closed at $105.91 on Tuesday, with the newly listed stock having a $25.64 billion market cap.
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CRWV: CoreWeave has also proven to be a powerhouse following its late March IPO, which debuted at $40 per share. The stock closed Tuesday at $154.90, up more than 280% since its IPO, with a market capitalization of more than $89 billion.
However, the stock dipped Tuesday on news that DA Davidson analyst Gil Luria highlighted some "red flags" and called into question the value being generated for equity holders.
"CoreWeave disclosed a pro forma contract financing structure example to analysts earlier today, trying to indicate shareholders will get some returns during the duration of the contracts being signed. We believe the disclosure (even if accepted at face value) very clearly illustrates the exact opposite point," Luria said in a note to clients on Tuesday.
RDDT, ALAB: Both Reddit and Astera Labs had their IPOs in March 2024 and both stocks have maintained large gains in the following year.
Reddit's initial public offering was priced at $34 per share, valuing the company at approximately $6.4 billion. Reddit shares closed on Tuesday at $117.09 with a market capitalization of $21.68 billion.
The social media platform's financial performance has been strong since its IPO, with a 68% increase in revenue to $348.4 million in the third quarter of 2024 and its first quarterly profit since going public.
Astera Labs' initial public offering was priced at $36 per share in March 2024 and the stock ended Tuesday's session at $91.46, more than double the IPO price.
Both Astera Labs and Reddit have delivered strong IPO performances and sustained significant long-term gains.
Circle and CoreWeave have the potential to perform like Reddit and Astera Labs if they can maintain their current growth trajectories, manage risks and execute on their strategic plans.
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