Ep. 327 Here’s How To Trade The High-Octane IPO Boom
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Hello and welcome to another episode of the Investing with IBD podcast. It's Justin Nielsen here, your host, and joining me today on July 2nd, 2025, we have one of our IBD markets reporters, a senior markets reporter, in fact. He actually started just a little bit before me. He was answering the emails, but

AOL.com. You remember that, Ken? Answering emails for the education department. So it's Ken Shreve, our senior markets reporter, also a co-manager of the leaderboard model portfolio, and recently addition to the bench of the IBD Live hosts. He, of course, has been a panelist for a while. Welcome, Ken.

Hey, Justin, thanks so much for the introduction. Great to be on with you again. Yeah, it's great to have you. I mean, look, this has been an interesting week here, so we're going to get into that. But more importantly, we're going to focus a lot on what is going on with the IPO market because, I mean, 2021, we saw a just –

a fire hose. There were so many IPOs and SPACs, the special purpose acquisition companies that came out in 2021. And then 2022, that just really kind of came down to a trickle. And of course, we always look at IPOs as kind of the lifeblood, the innovators, the new companies that are coming out. So we'll get into that a little bit. But start us off. What kind of drew you to the IPO market this year and what's changed in your mind?

Well, you know, listen, I think the market has been performing very, very well. And, you know, you just add kind of a rejuvenated IPO market. I think it bodes well for a good year.

Obviously, the follow-through day that we saw back in April had a lot of power. There were a lot of stocks that were working and breaking out of bases. And again, now you have an IPO market that is starting to show signs of life. Obviously, the two big ones we'll talk about today, CoreWeave and Circle Internet, have been growing.

have been a great, uh, great gainers. We'll talk about how to, how to handle those. And, you know, we've got some, uh, others, uh, lesser known names with pretty good fundamentals that are just kind of consolidating here. We'll touch on some of those and, uh, you know, it's, uh, the second half of 2025 is, uh, uh, expected to be pretty strong right along with the, with the first half here. So I think, uh, you know, overall the market looks good. And when you, when you've got new issues, uh, high quality, uh,

Yeah. And I guess let's maybe start with that question. Yeah.

What is quality to you? Because, of course, as you mentioned, I mean, there were so many companies that came out in 2021. And, of course, the growth really seemed to top in February of 2021. And so a lot of those just really didn't have necessarily great years as it kind of got into a risk-off approach. But

Some people get excited about wanting to buy IPOs on day one because they see some of these incredible moves, but the reality is that's not necessarily – they look at the IPO getting priced out at $30. It goes up to $100, and they're like, well, I want that. Is that feasible? Yeah.

Yeah, it's really not a great strategy. I mean, sometimes that will work, but plenty of other times it won't. So we have a pretty good strategy with IPOs. We just like to see it come public and let the...

let the stock do what it's going to do during the first several days of trading. But eventually, you usually get an IPO base of some kind. Sometimes they're very short. I mean, we'll talk about Circle in a little bit, but that was a super, super short

IPO base, it was only just a matter of days. Others, like a CoreWeave, they actually formed a legitimate IPO base. When you talk about quality, a lot of IPOs are going to come public and it's hard to really get a handle on the company's earnings picture. Sometimes they're losing money.

Other times there's no revenue either. So high quality, to me, is going to be an IPO that starts trading. Always want to look at the underwriter, Morgan Stanley, J.P. Morgan, Goldman Sachs. So those are some of your elite IPO underwriters. Business has been slow for...

for them. But again, they're starting to see an increase in the number of IPOs. So I like to know who the underwriter is. And then quality is also just going to be what's the new product or service that's fueling growth and what is that and is that

translating into legitimate bottom line and top line growth. So we've had plenty of IPOs recently that have pretty compelling fundamentals. So we'll look at those as sort of the higher quality names as opposed to the really, really speculative, smaller, some smaller names that maybe it's just not quite as easy to get a handle on their fundamentals.

No, absolutely. So let's maybe go to the slideshow real quick because you did want to share some stats. So maybe we can kind of start there just to kind of talk a little bit about the changes that you've been seeing. And a lot of this data is coming from Renaissance Capital. Of course, Renaissance Capital has a ETF, ticker symbol IPO, on.

Oddly enough. So, yeah, if you're looking at this data from Renaissance Capital, what are you looking for to kind of gauge that health?

Well, you know, we saw 397 companies come public in 2021, the most in several years. And then it just kind of fell off. I think it was the most in a couple decades, right? I think you have to go back to 2000. For as far back as you could see. And then it kind of fell off the cliff.

in 2022, but with 71 companies coming public. And then 2023, you saw 108. And then 2024, 150. So you are definitely seeing some signs of life in the IPO market. And I suspect, again, 2025 is off to a pretty decent year. I don't know if we're going to top

150, but nice to see that upward trend over the past three years. And this data, just in case people can't read at the bottom here, again, we've got 150 for 2024 with 29.6 billion in proceeds.

And this is direct listings with a market cap of at least $50 million and excludes closed-end funds and SPACs. So this is really kind of your IPOs, not your SPACs. And then also, just to kind of get a look at the quarterly data, maybe you could walk us through this. And just as a caveat, this is kind of the same thing.

Same information in terms of market cap of at least $50 million and also excludes the closed-end funds, offerings, and SPACs.

There you go. Yeah. So this is, again, you saw 53 companies coming public in 53. And right now we're at 44. So, again, just some – Renaissance Capital's got some great information. I like to use the site a lot. So just a couple of visuals here showing where we are in terms of the number of

of IPOs. So again, it's a market that is starting to show signs of life. And when you couple that with a nice strong market uptrend, that tells me that there are stocks around that can do the heavy lifting here and provide more fuel for this bull market. And

Again, you kind of mentioned that sometimes in terms of the quality, you're really looking for these stocks that do have fundamentals, that do have earnings, that do have at least revenue and some strong revenue growth, which as a reminder for folks, a lot of times people think, oh, well, they don't have any history until they start trading, but that's not the case, right? You've had a company as part of the IPO process, they do disclose assets.

The data that they have, that's just, again, part of the process in having their initial public offering. But what about the chart? What about the technical action? Is there anything in particular that you're looking for to tell you, okay, this is something where the fundamentals, check off my boxes, anything on the technical side that you're focused on?

Well, I mean, definitely on the first day of trading, you want to see a nice up session. A lot of companies are going to price in a proposed range, and demand will be so strong they'll open much higher due to demand.

due to strong demand. So you want to see a good, solid first day of trading. Above all else, you really want to avoid, we touched on it earlier, you want to avoid the pitfall of trying to chase performance on the first day or two of trading. It's easy to do with some of these high flyers, but I think with IPOs, you want to let them develop a trading personality. You want to know if

you know, the intraday price action is whippy and volatile or does it tend to trade in orderly fashion? So these are things to look for. But again, when a stock first starts trading, the importance of just letting it develop a trading personality is important.

is paramount and then we often talk about IPO bases which can be a little bit shorter than a typical five week, six week, seven week base. So you can make some exceptions with IPOs but it's just important to just wait just for a little bit of a consolidation period especially if it's a real hot IPO that opens sharply higher and goes on a nice run. On the one hand, yes, that is a strong demand

But if you're chasing IPOs during the first couple of days, that's an easy way to lose money. So you want to understand the fundamentals of the IPO and then just watch the price action for a few days and let it develop a trading personality.

And how how long is enough? You know, you said, OK, the the first day you're not going to do anything, probably the second day either. And you mentioned that you don't have to wait seven weeks necessarily for a full fledged or six weeks for a full fledged cup or what have you. So how how long is kind of the shorter, shorter end for you?

Well, you're a student of the market. Help me out here. Google had its IPO. That was a fairly short IPO base, if I recall. Yeah.

Yeah, you know what? I'll go ahead and I'll go to the tape if you don't mind. Sure. We can pull that up because I think it is a good example. So, of course, before it was called Alphabet, we knew it as Google. And it had its IPO right here in August 19th, 2004. This was a Dutch auction, so a little bit of a different animal.

And one of the things that was interesting about this, it was kind of viewed, Bill,

Bill O'Neill, the founder of Investors Business Daily, kind of viewed this as a high-tight flag. The reason being that where it IPO'd, and I'm blanking on the price a little bit, but it had such a big move from its IPO price to this peak, and then it just didn't give up any gains. So this was only a two-week consolidation here.

Again, he wasn't necessarily saying, oh, buy it on that first week. But after that two-week consolidation, to him, he was like, oh, yeah, this is in play. The tight action, kind of high-tight flaggish. Not all IPOs are going to look like this, but Alphabet was just a perfect example. That was probably, like you said, a two-week consolidation.

a two-week consolidation. But as it consolidated in this chart, kind of held near that round number of 100, split adjusted, I assume. And then once it was trading tightly and wasn't giving up any ground, closing pretty much where it closed the prior session, then it started to move higher and retest more.

the highs from its third day of trading, and then that was actually the breakout. So Alphabet, Google was a short IPO base, a couple of weeks long. Sometimes they can be longer than that. Again, the point is just to wait for the IPO to take a breather. Once they take a breather, if it's really strong, it'll start to retest those former highs.

And if it breaks out over those former highs, Google shows that's not a bad time to enter an IPO. Yeah. Yeah. And of course, this had, you know, after it did break out of that, it just had a tremendous run from, you know, a little bit over 100 to 200 in just a few weeks. Didn't do much for a while. You know, a lot of.

A lot of the end of 2004 and 2005 was at the first half of 2005 was pretty flat. But then it took off for another move in the latter half of 2005 for another run. And I should also mention that this was one of those –

kind of inspirations for Mike Webster. When he started looking into the IPO base, he was like, okay, we got to figure this out. There's something here. These are so important. We don't want to lose these. And I'm just going to give a quick plug for

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But let's – oh, were you going to say something real quick? I was just going to say it always helps buying right. And then the question is just knowing when to buy right. So Google was just a textbook example. It was a short consolidation, but it didn't take the long – didn't take the stock long to start showing strength, retesting those former highs. And again, it never, ever –

threatened the buy point after it started its run. Yeah. And then I'm not sure if we can still pull it up. Let me see, but I...

Am I misremembering? Did we have Michael Kors? Was that on the leaderboard product very early on in its IPO? You know, it might have been, but my memory is going to be fuzzy going back that long. It sounds like it might have been, but, you know, another great breakout from an IPO base for Kors for sure.

Yeah. And I mean, this is I assume this is because it's, of course, called Capri Holdings. One of the tricks with this is Michael Kors, of course, the fashion designer, you know, came out with the IPO, but it wasn't to expand. It was really for him to divest his holdings. But you can kind of see a similar thing here. We had this very short IPO base. And of course, our market surge increased.

our market surge pattern recognition identifies that IPO base. And this, this one came out and just really didn't look back. I mean, it held a 10 day moving average line, you know, for quite, quite a, quite a ways before it topped, you know, and then started. And one of the things that was hitting this was a number of secondary offerings. So I guess on the fundamental side, is that ever something that you're, you're watching very closely? Yeah.

Is it an expansion reason that they're having their IPO or is it a, oh, the owners are really trying to cash in?

Yeah, well, I think Capri was just a classic buy, just like Google was. You mentioned it was the same sort of setup. It opened, and then it just kind of paused. I mean, this is exciting stuff because there are going to be companies that are going to be coming public in coming days and weeks.

And we'll watch how they trade for the first two days. If it's a strong IPO like Google or Capri back in the day, it should make some progress during its first few days of trading. And then this is why we use precedent, because we know future IPOs are going to show this type of price action as well. That's the thing about technical.

analysis, it just repeats and repeats and repeats. What worked 50 years ago is still working today. Capri, nice short consolidation and then just an unequivocal buy signal when volume came into the stock. That was 2.4 million shares on an up day and then the breakout never looked back. And

What about on the more speculative side? I mean, I remember that there was certainly a lot of hype when, let's say, Virgin Galactic came out and, you know, some stocks like that, again, where they didn't have revenue or anything like that. But that didn't stop the stock from going to the moon, as it were. Do you ever play some of those just based on the technical action?

It depends. Again, in cases like that, I'm going to look at the underwriter. If I see J.P. Morgan, Goldman Sachs, Morgan Stanley in there, that's going to be a feather in the IPO's cap. So sometimes I'll have my aggressive hat on and we'll nibble. But by and large, I think I'm conservative enough to know what

what qualities I like to see. So most IPOs I'm going to look for at least. If it's not profitable, that's not a deal breaker. But if it's not profitable, I do want to see meaningful revenue growth because that meaningful top line growth eventually works its way to the bottom line. But if it's an IPO that is speculative with no earnings and no sales, I don't think I've ever seen

bought one like that. So at the very least, I like to see big revenue growth if it's not profitable yet. And one more question to kind of on the fundamental side, I guess one of the concerns that a lot of people have is that there's so much of the venture capital funding now

that's kind of driving the price up before it even comes to market. So some of these companies, it almost feels like they've already had their run up before they come public. And you're just kind of left at the at the later stage. Sometimes, you know, it's already had a lot of its growth. Is that is that something that you believe or where do you come down on that?

Well, you know, Justin, I try to keep it simple with the IPOs. I mean, listen, when you see a company that is going to start trading, you just want to see it do certain things on that first day of trading. So it's either going to show healthy price action or not. But, you know, if...

Again, if it's a strong, well-supported IPO, you should not see violent selling a day or two after the offering. You should not see whipsaw, erratic action. And we'll go over a couple of names later that...

have shown kind of wild, uh, wild action. Maybe not, uh, maybe not the best prospects, but plenty of others that, uh, you know, showed the price action that we, that we like to see on the IPO day. Just a nice, uh, a nice, uh, strong open, uh,

nice gains after that and then just a little bit of digestion and a period of consolidation, then you get your perfect entry. Yeah. And before we go into some of those stocks that are

that have recently come out. Let's talk about some that haven't come out yet and are on, in the batter's box, if you will, you know, or on deck. So a few of these that you mentioned, I guess we got Stripe, which is a payment processor. What, what can you kind of share in terms of your notes on, on this one? Well, Stripe,

Stripe had a tender offer earlier this year to shareholders and employees at Well that valued the company at $91.5 billion. So this is going to be a huge IPO. They haven't set a date yet. It is going to

It is going to come public, but Stripe is a payment processor, a very crowded space. But this is a company I did notice that total payment volume in 2024 went north of $1 trillion, and that was up 38% year over year. So this is a mega cap that is still showing pretty incredible growth.

It's going to be a widely watched IPO stripe. Again, we don't know when it's going to come public, but you're right. This is going to be one of the more high-profile names later in the year. And as you mentioned, it is a little bit of a crowded space. Do you know much about the company? What is it that they're doing different?

Well, I can tell you that what's interesting is that there are a lot of AI startups that are customers of Stripe. And you would include OpenAI is a big customer of Stripe. So is Anthropic, another AI company. So, yeah.

Like I said, $1.4 trillion in transaction volume last year. So they're obviously doing something right. But again, this is going to be another example of an institutional quality IPO. You're not dealing with speculation. It is a company that's got real numbers that has made quite a name for itself as a private company. And it should do well when it does come public.

Now, also in the finance space, another one that's coming up that's probably much anticipated is Klarna in the buy now, pay later space. We've seen that with Affirm kind of being the poster child there. So what can you tell us about Klarna?

Well, what I tell you about Klarna is that it's operating in another crowded space, buy now and pay later. But what's interesting about Klarna is that they were initially going to come public in April, but that's around the time when President Trump –

Announced Liberation Day in the Rose Garden, and the market freaked out, so Klarna shelved its plans. Probably the right thing to do. Again, Klarna has not set a date to come public. It is set to come public later this year, but they did postpone their offering in April due to that initial tariff volatility.

Yeah. And that does happen sometimes where, you know, timing is everything sometimes, which is why in 2022, which was such a prolonged bear market, you probably had a number of companies that were on deck for IPOs, but they're looking at the environment and like,

nope, no thank you. Because of course they want to get as much money as they can and in a risk off environment who really wants to stick their neck out on an IPO. So yeah, you have to look, they're in there to make money and if it's not a great environment, you know, they're just going to be like, okay, well we can hold off here. Companies, they do put a lot of thought into, you know, when they want to take their company public. They obviously want to do it in a healthy market. So,

Uh,

You know, with Klarna, I think they made a smart decision. They thought that the market was – there was too much tariff volatility at the time, so they postponed it. But now, you know, hey, we're in a nice uptrend here, so who knows? Maybe they will price sooner rather than later, but I suspect that they're looking at a strong bull market with still a fair amount of money on the sidelines here. Yeah.

It could be sooner rather than later. We'll see. Yeah. And just looking at some of the comments on our live YouTube stream, a few folks were saying, hey, that they really appreciated that you jumped on IBD Live as host. They were happy to see you there hosting. The Google IPO was at $85, so I'm glad someone put that in there because that's the price that I thought it was, but I wasn't quite sure. Now that you mention it.

Now that you mention it, that was it. Yeah, so the chart did reflect that pre-split price because when we do the change date on market surge, it tells you what the stock was at that time as opposed to adjusting for splits that happen after the fact, after that change date. And then, yeah, a few people talking about

how great IPOs can be. Of course, you know, Home Depot, Cisco, some of these that have just phenomenal runs where $1,000, you know, could have been, or even $10,000 could have been life-changing on those. So, yeah.

One more. I was going to say, I had Databricks on that list. I think you were probably going to go to that one. Exactly. Please do. Yeah, Databricks is basically a data analytics software platform. It is cloud, of course, and a big competitor to Snowflake, which has took a while for the market to recover.

snowflakes growth story was a laggard stock for for quite some time but data analytics is is big business so snowflake doing well in the current market data bricks is very very similar business to to snowflake

Last month in June, they said that their annualized revenue was going to hit $3.7 billion by the end of this month, and that is going to be up 50% year over year. So Databricks is on the radar as well. You've got...

really good underwriters here as well and seems like a fundamental powerhouse. So when Databricks does start trading, as you mentioned, even though it's been a private company, we'll likely have a few quarters of

earnings and revenue numbers in market surge, even though it hasn't reported its first quarter yet as a publicly traded company. So I think Databricks is another high-profile one.

with Stripe and Klarna. And I suspect that a lot of companies are thinking about coming public, just kind of looking at where the market is right now. There's a lot of optimism about the economy. The market seems to be shrugging off bad news. Earlier today, we had a pretty weak reading from

ADP private payrolls. And, you know, we'll see, we'll see if that, how that translates to the jobs number tomorrow, but you know, some softness, softness in the jobs market, but the market is kind of shrugging off bad news and you continue to see money coming in from the sidelines here. Yeah, no, absolutely. Have you ever spotted McDonald's hot crispy fries, right? As they're being scooped into the carton.

And time just stands still. Ba-da-ba-ba-ba.

Well, let's shift gears a little bit and pull up some more charts. And we can start with CoreWeave so you can actually walk us through some current names that are looking interesting. These are all recent IPOs. And certainly this one seems to be getting the most attention. It's kind of in the business of supporting Gen AI. So that's got a buzzword right there. Give us your thoughts here, Ken.

Well, yeah, I mean, obviously, CoreWeave is a name that everybody's been talking about. It was a classic breakout from an IPO base over the 50 level. This one, again, had a nice debut on its third day of trading. It soared up to the $50 level, and then it started to just kind of form a base, hit some resistance at $50.

And then you pointed out the breakout day. So, again, looking at IPOs like this that consolidate soon after a successful debut, you just want to watch and wait for that bullish move. I mean, CoreWeave was a picture-perfect...

uh, breakout from our first stage, uh, IPO base. That was, uh, kind of end of, uh, April, early, early May, I think, but, uh, has, has not, uh, has not looked back. Now I know a lot of people want to own, uh, core weave. The question is, uh, uh,

who are going to be the disciplined ones that just keep this on the watch list and watch how the current consolidation plays out. Because right now, leading stocks tend to find support at their 21-day lines as they pull back.

Looks to me like support, it's still testing the 21-day line, but when you basically triple in price, many would say this deserves some time to just take a breather. If this were to turn relatively

right around and start threatening all-time highs again after one week of consolidation, I probably would still pass on this name and wait for what I think would be the best time after it forms a legitimate base. So it's still very early in the stages of a new consolidation here, but certainly a company that has been

buying NVIDIA's chips hand over fist. I think at last check, they had bought more than north of 250,000. They have 30 plus data centers that they operate around the country using these NVIDIA chips. And they basically rent out, you know, cloud access for AI development. So very, very

very dynamic business. It is right on the verge of profitability. You can see losses have narrowed quite a bit in recent years. But that revenue growth, we know when you see revenue growth like this, that this is a name that we want to keep paying attention to. So

420% year-over-year growth when they reported first quarter results. That was their first report as a publicly traded company. So

I would like to own CoreWeave. I did trade it during its run-up over the $100 level, but at this point, I think I'd just like to wait and see how this consolidation plays out and give it some time to digest these huge gains in recent months.

Yeah, no, absolutely. And I, I, I played this as well. I think I might have a very small position in it. Um, but, uh, my initial buy was actually right here breaking this downtrend. Um, I got shaken out here. Um, I bought it back as it crossed 50. Uh, I think I got shaken out on, on this day maybe. And then I didn't have the guts to, to hold it, um,

you know or to get back in uh on this day because we were just a few days before the er the first earnings report and i missed i missed the big run up and then you know of course i'm uh can't stand it anymore and i start buying up here as it really kind of tightened up as as you see on the weekly chart here uh very tight action so when it was coming out of that um

Um, I, I bought a little bit, but then I sold, I sold most of it. Um, you know, before it, before it started coming down to the 21 day, I might have a few shares left, but, um, they're kind of, uh, nothing, nothing at this point. And then also it's worth mentioning that, uh, I believe Charles Harris was talking about, uh, this, you know, using this, uh, eBay, um, as a, uh, as a precedent for, um,

for core weave. Uh, this was an idea that he got from, uh,

Eve Bobak, who also shared this kind of idea on the IBD Live podcast. Not IBD Live podcast, but yeah, a very similar thing that was going on here with eBay from its IPO. So definitely worth taking a look at a lot of IPOs to kind of get a sense of how you might be able to handle it. And one thing that I think we need to talk about real quick here, Ken, is how...

These can be a little tricky because they have some extra volatility. I mean, this day right here, you're like, oh, what was wrong with you, Justin? That doesn't look bad at all. But it was – I think that was like a 6% or 7% drop that day. And so if you've got size, that can be tough.

And if you don't have size, you know, maybe you, you know, you can withstand that. So it's definitely position sizing matters, understanding the greater volatility that can exist in these stocks. But, you know, they can be very profitable.

One of our outstanding writers, Reinhard Krauss, covered CoreWeave in a New America piece. I think this was back in May. So a couple of months ago noted that Microsoft was CoreWeave's biggest customer, making up 62% of total revenue for CoreWeave. So I thought that was interesting. But if people want a lot of information,

A lot of additional color on CoreWeave and their business, New America Story by Reinhart in May. You can find that just in the search box at investors.com. But interesting, Microsoft is their biggest customer right now. Yeah.

Let's turn our attention over to Circle, another one that has been just a phenomenal move in just a few weeks. You can see a little consolidation here and then a gap up and just day after day of incredible gains. You had a 25... Again, it's amazing to look at this and...

And imagine how much this is up. 25% on June 13th here. And then that got followed up by a 33% move on June 18th. Another 20% move on June 20th. And then, you know, this didn't close well. It was in the mid-range of the day. But that was still a 10% gain at the close, even though it was well off its highs. So we're consolidating here now. What are you looking for on this one, Ken? Yeah.

Well, Circle is profitable. They turned their first annual profit in 2023. You can see $1.21 a share after a series of losses, and they made 70 cents in 2024. Because it's a new issue, we don't have a lot of estimate data yet in terms of future earnings. But here is what happened.

looks to me similar to core weave, just a stock with very compelling fundamentals. Like everyone else, I'm still trying to understand the ins and outs of digital currencies and Bitcoin and blockchain and stable coins. This is what Circle Internet Group, as far as I know, they have two stable coins now, one that's pegged to the U.S. dollar and one that is pegged to the euro.

But when you hear news recently that retailers like Amazon and Walmart are looking into stable coins as a form of payment, this company certainly seems like it's in the right place at the right time. First quarter hasn't reported losses.

earnings yet as a publicly traded company, but you can see we've got data in here. You mentioned from just prior prospectus, but revenue up 58% in Q1, and they made 29 cents a share. That was up 32%. So

This is another name that we want to watch, similar to CoreWeave. You just want to wait for another entry here. It is consolidating.

below that short-term support level, below the 200 level. But you notice that the volume has been getting quieter and quieter on the decline. So clearly an IPO that was under a lot of accumulation after it went public, and now the pullback looks fairly orderly. I mean, it went up close to 300. Now it's below 200. But this is why you want to let

You know, IPOs just kind of, you know, calm down, form a base. CircleNet could be trying to bottom here, and maybe it'll start rounding out the right side pretty soon and move back above that 200 level. But you just can't stress the importance enough of being –

And if you want to take a stab, if it runs up above the 200 level with conviction and you want to try it, I mean, you can do it with a really small position. But you'd have to trade it as opposed to – I'm always thinking in terms of position-wise.

position trades here, which is why with CoreWeave and CRCL, I'd like to just see some sort of base that I could buy off of. But between CoreWeave and Circle Internet, these are what I would consider two institutional quality

IPOs because of the revenue and they have that new product or service that should drive nice growth going forward. You can see it sells at a very high multiple right now, but

But stocks with high multiples like this, they get that premium because of growth prospects. So when the company reports second quarter earnings, I know investors are probably going to be interested in seeing some acceleration in that revenue. So if they can come out with a quarter where revenue is up,

you know, 60%, 65%, uh, you know, that, uh, that, that would be a good sign. It doesn't have to be, but if you're a new issue that's showing accelerating, uh, you know, growth, that is, um, that's usually a good sign. So we don't know if that's going to happen with a circle internet or not, but at least those first quarter, uh, numbers looked, uh, look pretty good. Yeah. And just as a note, um,

Sometimes you have to look at some of these numbers here, and it's a little suspicious that it was $0.16, $0.16, $0.16 versus $0.30 versus $0.30 versus $0.30, and all these numbers are the same. Sometimes what they do is they maybe don't have quarterly data, and so what they do is they take an annual and just divide it evenly. So that might not be a mistake there. That might just be the way that they –

split, split that annual data evenly. Um, and I would also be remiss. Uh, I mentioned those just phenomenal gains on the upside. I would be remiss to not also mention, uh, some of the downside, you know, drops 15% on this day, uh, you know, on, uh, June 24th down 10, 11% on June 25th and down 15 and a half percent on June 27th. Uh, so remember, you know, that, uh,

with, with some of these, you know, high flyers, they can also drop, uh, very quickly. So. Well, three, yeah, three sharp, uh, down days. And then you look at the past, uh, three sessions and you can already see the trading is starting to, to quiet down, maybe attention turning away from it a little bit because those were, those were three pretty big, uh, pretty big drops after it came off that, uh, 300 level. But again, over the past three trading sessions starting to, to tighten up here. So we'll see if it can, uh,

see if it can bottom and try to form the right side of a base here. Yeah. Let's also take a look at Hinge Health. It just so happens, I haven't tried it myself, but our employer, News Corp, actually has this as an employee benefit, something that I was actually looking at because sometimes sitting so much makes my back hurt. So this one kind of had that look.

It had a strong move right off the IPO, consolidated, actually stayed above the IPO price, came down to 33.42, a depth of 24% on this base here, but held above the IPO price. And a breakout recently shot up and then came right back down to the pivot point and seems to be getting support there so far.

Yeah, there was quite a bit of volatility in the stock yesterday when growth stocks sold off hard. That was a pretty bad price bar when it kind of fell back below that 50 level. However, today I would call this very encouraging price action because it tried to extend losses from yesterday, but all it did was basically retest the IPO base buy point.

And it closed up near high. So the stock showed a lot of support today. That tells me that this buy point here looks like it was just below 44.

was a pretty good entry for the stock. So nice test of that 44 buy point today. Still in a buy zone here. You can tell this stock, a lot of new issues are going to be prone to volatile swings today.

But Hinge Health, at least you do have accelerating revenue growth here. So this is important. When we talk about revenue growth accelerating, we're just talking on a sequential basis. So for two quarters in a row, you can see September end of quarter last year, revenues up 24%. Three months later, revenues up 44%. And three months after that, revenues up 50%. So...

Another company, looks like they do just three quarters in a row of profits here. Don't have a lot of annual earnings estimate data, but again, serving a niche market here, basically a digital healthcare firm,

Physical therapy, pain management programs. So I'd like to look at this one. High PE, but you've got some numbers, bottom line and top line growth numbers to look at here. Retested the buy point after a volatile day yesterday, but came down and held support right where it should today.

Yeah. Let's go through some bonus stocks here real quick because we're getting a few folks asking about some other recent ones. Chime Financial, this is a fintech company. I actually bought this on this day and I was right back out yesterday. So on July 1st, because it was coming in very sharply. So I wanted to get out of the way of that one. And I'm glad I did because it was down a

you know, another 7% today after being down 6% yesterday. So any thoughts on this one?

Well, volatile first day of trading. It priced at 27, ran all the way up close to 45 on its first day of trading, and closed near its session low, still well above that 27 level. Looks like the close was right around 30, 37, so about 10 points above the offer price. Now, here again, a stock that was...

You just need to look for an IPO base here. You've got a company that looks like it's right on the verge of profitability. First quarter adjusted profit of $0.04 a share. That was after a couple of quarters of losses. But again, the revenue growth past four quarters, top line ranging from 25% to 39%.

Another FinTech here operates basically a mobile banking platform known for a lot of fee-free accounts. But this is kind of an interesting one because it definitely has a different look than CoreWeave and CoreLabs.

the core, we even circle, uh, internet. You can see it's down, uh, down near lows, kind of down near the 30 level. So now this one, the way I would handle this one is, uh, wait, wait for it to start to approach, uh, that, uh, that, uh, recent, uh, recent high, just over 35. Um,

I would eyeball this. You know, you could wait for an IPO base to form here, or if it starts to get its mojo back and starts to make a run at that 35 level, some people might use that high, intraday high of around 36 as maybe a way into the stock. For a position trade, probably not ideal, but for a trade, I could definitely see that happening.

being a game plan for some aggressive traders.

And a few stocks that probably need a little bit more time, eToro, this one came out, you know, looked really good on this day, but quickly reversed, just needs probably a little bit more time. It's, again, there's no reason to sit in something while you wait for that because it can be a long time for some of these to kind of recover and get back on track. There was also a lot of people asking about, you know, Voyager Technologies, another one that,

While it's above its IPO price, it's just – it's basing right now. So for me, there's not much to do there until it starts climbing on that right-hand side. Go back just to the prior IPO we just looked at before. Yeah, eToro. Yeah, there was a lot of optimism here only because of –

Robinhood has been a big, big winner in the market. And this one, you know, a lot of optimism that this was, you know, going to be a hot stock just like Robinhood Markets. And, you know, it broke out. We go back to the eToro chart. And, again, here you had another classic IPO base, but then just a spectacular reversal off of that 80 level. So, yeah.

This one has a similar look to some of the other new issues that we've been talking about. You could wait for a new base to form here. To me, that high from last week, I think that's Friday's high. Some technical traders might look for eToro to move above that level.

The issue with eToro right now is I'm still trying to understand the company's growth. I haven't really done a deep dive into eToro because I do notice that after several quarters in a row of really nice revenue growth, in Q1, revenue was only up 11%.

there might be some issues there with how we're looking at the revenue. You had a lot of big earnings increases as well, and then earnings down 6%. So I want to kick the tires a little more on eToro to understand the growth prospects here. But a lot of people surprising that it's been struggling, especially in light of, again, how well Robinhood has been doing.

Right, right. And I think that also is maybe a good place to remind people that it's, you know, a lot of these can have exciting stories and you can really convince yourself that, oh, yes, this should do something.

you know, X, it should go to the moon. It should do this. But at the end of the day, you really have to use the chart for your timing and not fight, uh, a stock that's not agreeing with you or a market that's not agreeing with your assessment of the, the stock's potential. Cause you, you might be right eventually, but, um,

You could be sitting on a dog for a very long time while it goes through its basing, while it goes through that period where the institutions are doing their own kicking of the tires and trying to understand how to value the new company. So we tend to stay away from those that are basing, and then we'll get in when it starts showing that strength and participate on the up move. Yeah.

Not so much on the sideways side. eToro is another IPO that's still in the early stages of developing a trading personality here. To me, again, that sharp reversal off of the 80 level, I know that this is a stock that can really move a lot on an intraday basis.

basis. So this one, you know, a little bit wide and loose, we would, we would, we would refer to this as wide and loose because of the, the big intraday swing. So it's not for the, not for the, not for the faint of heart, but because it's a new issue with, you know, some, some compelling fundamentals. Again, I want to understand the company's growth trajectory a little bit more, but

you know very liquid with average daily volume just over two million shares and uh so it has has potential just going to let it kind of settle out here

Yeah. Well, Hey Ken, it was great having you on, uh, for folks that are, uh, a lot of positive comments in YouTube. A lot of people are like, Hey, this is great having Ken on, uh, just as a reminder, uh, you can find him on the stock market today video generally on Wednesdays and Thursdays. So Ken was kind enough to jump on right after his SMT video, uh, earlier so you can get his market thoughts. We didn't spend too much time on that, uh, today, but, um,

I figured you just gave your thoughts on that half an hour ago or an hour ago at this point. So people can tune in to the Stock Market Today video, get your market thoughts there. Also, you are a frequent contributor on the IBD Live as a panelist. Now shifting to host spot. So again, a lot of places to see Ken. And then also you can be followed at X, at

IBD underscore K Shreve. That is it. Did I miss anything? I think you got it all, but I think we have to give just a tip of the cap to the broad market here. You know, that distribution day that we saw on the NASDAQ,

came with a lot of violent selling in growth stocks, but a nice recovery today for the NASDAQ, recouped pretty much all of what it lost yesterday. And again, the S&P 500 on a day when growth stocks sold off very sharply on Tuesday, this

you know, traded in just an unbelievably tight, uh, tight range and still showing a lot of, uh, strength and support here. So should be, uh, should be a good, uh, a good market for, for IPOs, uh, coming up. And again, I, I wouldn't be surprised, uh, to, to see the IPO, uh,

pipeline continue to heat up here. Just make sure you're looking at a company that's got some growth, even if it's not profitable, if it's got good top line growth. Also want to look at fund ownership. Sometimes IPOs are not going to have any fund ownership because they're so new. Others like CoreWeave, Circle Internet, pretty good fund sponsorship in the early going.

Yeah. And sometimes it takes a little while for that fund sponsor to sponsorship to show up. Yeah. A little bit of lag, but you, you start seeing it in the volume, right? You, you can kind of say, okay, let, yeah, there's some institutional interest here because you're seeing that volume. And again, sometimes within the first few quarters, you'll start seeing those funds creeping in and, and you'll, you'll see the average volume. You'll look at that line and just see that volume.

Really kind of gaining strength, showing that, yeah, more and more institutions are taking spots there. So, again, really appreciate you coming on, Ken. Don't forget also, Ken can be kind of followed along with David Chung, Hatman, with the leaderboard choices. That model portfolio is something that Ken is very heavily involved with.

with. Not to mention the big picture and all of the stuff that you write, the weekly column, earnings preview, a lot of stuff. So again, a lot of places to follow Ken's stuff. Thanks a lot for being on.

Okay. That's going to wrap it up for us this week. Uh, we're going to have another guest next week, uh, show up. Mish Snyder, chief strategist at market gauge is coming back on the show. Uh, don't forget tomorrow, July 3rd is a half session. So if you're like, why aren't my stocks moving after, uh,

1 p.m. Eastern. It's because the market's going to close early in preparation for the July 4th holiday. Hope you all have a safe 4th of July. A great time to celebrate a pretty close milestone for U.S. of A. with the Declaration of Independence. So we'll be looking forward to celebrating that and hope you all have a great weekend. Take care, everybody.