Looking to round out your tech holdings with a fresh initial public offering (IPO)? If so, then you’ll definitely want to check out San Francisco-based GitLab (NASDAQ:GTLB), whose shares have recently become available.
No, your eyes aren’t deceiving you. I must admit that at first I thought ” GitLab” was a typographical error, as it sounds a lot like Microsoft (NASDAQ:MSFT)-owned GitHub.
But no, it’s not a misprint. GitLab is a separate business, and it’s an open-source project that’s used by more than 100,000 organizations.
Not only that, but GitLab has a community of 2,500+ code contributors – a redoubtable army of proud geeks. Clearly, this is no ordinary company, so let’s delve into the brief but fast-paced history of GTLB stock.
A Closer Look at GTLB Stock
Let’s go back to the beginning, which actually was just a few weeks ago. On Oct. 13, GitLab announced the public offering of 10.4 million shares of its Class A common stock for $77 per share.
Can you guess what happened next? In a sign of Wall Street’s insatiable demand for IPO stocks, GTLB stock leaped 35% on its first day of public trading on Oct. 14.
On that day, the stock touched $103.89, and GitLab’s market capitalization surged to $14.9 billion.
GitLab managed to raise around $650 million through the offering; that’s not too shabby for a company that’s sometimes unfairly pigeonholed as a lesser clone of GitHub.
As for the progress of GTLB stock, it reached a peak of $132.35 on Oct. 25 before retracing to $110 a few days later. Today it’s trading around $115.
Before jumping into the trade, cautious investors might want to wait until Wall Street establishes a reliable range for the stock. Or you can just pick up a few shares and try to enjoy the ride, volatile as it may be for a while.
A New IPO, but Not a New Company
While GitLab’s geek squad is growing quickly and the company is still evolving, don’t get the impression that it has an untested business. As I learned from InvestorPlace contributor Chris MacDonald, GitLab has actually been around since 2011.
GitLab’s business consists mainly of a coding platform that got its start as a small, open-source project. However, as we’ve discussed, GitLab has since grown into a very large community.
Developers can access GitLab’s tools to help reduce cycle time and solve coding issues. As the company puts it, GitLab is “an open core company which develops software for the software development lifecycle.”
That, basically, is what separates GitLab from the admittedly more famous and established GitHub. It’s the feeling of community and the openness to contributions that makes the difference for GitLab.
That has undeniable appeal, as GitLab currently has 30 million estimated registered users and more than 1 million active license users.
A Remote-First Business Model
In the wake of the Covid-19 pandemic, more businesses are switching to remote work spaces – and GitLab was definitely ahead of the curve in this trend. InvestorPlace contributor Samuel O’Brient’s report on GitLab observes that the company is part of a “remote-first” club as it has no physical headquarters.
In fact, GitLab operates completely remotely, employing around 1,350 individuals in 65 different countries. I’d say that’s a smart way to conduct business. Being remote-first implies cost savings and increased efficiency compared to the old-fashioned, in-person work paradigm.
In any case, GitLab’s business model appears to be a resounding success. As evidence of this, we can observe that the company recorded $58.1 million of second-quarter 2021 revenues. That’s an increase of 69% on a year-over-year basis.
The Bottom Line
All in all, GitLab is a fresh IPO, but a decade-old company that’s been too often compared to GitHub.
Frankly, GitLab deserves to be placed in its own category. The company’s army of dedicated developers is expanding rapidly. Besides, GitLab’s business model is perfect for the 2020s.
So feel free to take a small, bullish position in GTLB stock now. Alternative, you can wait until the market establishes a price range in the shares, which will hopefully happen soon.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.