7 Struggling IPOs to Buy for the Long-Term

  • For the extreme contrarian, these ideas could represent IPOs to buy.
  • NuScale Power (SMR): NuScale’s nuclear innovation brings needed relevance to the table.
  • Warby Parker (WRBY): Warby Parker cynically benefits from global myopia trends.
  • Wearable Devices (WLDS): Wearable Devices sci-fi innovation could lift its share price.
  • Forza X1 (FRZA): Forza X1 could cynically gain prominence due to the wealth gap.
  • Rocket Lab (RKLB): If you believe in the space economy, Rocket Lab could be worth a go.
  • Bumble (BMBL): Bumble has a different take on the dating scene.
  • Applied Blockchain (APLD): If you’re patient, Applied Blockchain might work out in the end.
IPOs to buy - 7 Struggling IPOs to Buy for the Long-Term

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Sometimes, heavily hyped initial public offerings (IPOs) don’t always pan out. Throughout this year, a myriad of headwinds, ranging from monetary policy shifts to geopolitical instability contributed to a dour environment. Given that public market debuts tend to be growth-centric affairs, ETFs suffered badly.  However, there are some top IPOs to buy.

Fundamentally, all recent IPOs to buy endured a massive timing dilemma. Back in 2021, public market debuts throughout the world raised a record $594 billion, according to Reuters. Now, data from FactSet reveals that U.S.-based public debutantes suffered severe demand loss.

Please, make no mistake about it. Every idea among IPOs to buy on this list does carry risk. Frankly, you should only engage these ideas with money you can comfortably afford to lose.  Some of the top IPOs to buy include:

SMR NuScale Power $11.75
WRBY Warby Parker $14.98
WLDS Wearable Devices $1.01
FRZA Forza X1 $2.04
RKLB Rocket Lab $4.56
BMBL Bumble $24.35
APLD Applied Blockchain $1.65

NuScale Power (SMR)

clean energy stocks: a nuclear power plant in Belgium
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Tied to the nuclear power industry, NuScale Power (NYSE:SMR) specializes in small modular reactors or SMRs; hence the ticker symbol. Featuring a smaller physical footprint and thus greater modularity in terms of geographical integration, NuScale’s SMRs may represent the future of clean, reliable energy.

Science undergirds the speculative bullish narrative for the SMR stock. As I mentioned previously, one uranium fuel pellet features the same energy potential as 149 gallons of crude oil. In addition, nuclear power facilities command a capacity factor of nearly 93%. Basically, this metric confirms that nuclear energy represents the most reliable energy source – and it’s not even close.

To be fair, many on Wall Street are waking up to the opportunity in SMR stock. Through the Oct. 4 session, it’s up 21% on a year-to-date basis. However, it’s down 14% in the trailing month, opening doors for contrarian speculation.

Warby Parker (WRBY)

upcoming IPOs
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Among the top speculative IPOs to buy, Warby Parker (NYSE:WRBY) provides eyewear products. Since the start of this year, WRBY finds itself down 66%. Although the frontline concept intrigues. providing eyewear at discount prices, critics pointed to viability (or lack thereof). According to Gurufocus.com, WRBY rates as one out of 10 in terms of profitability. Because of the extreme pessimism, Warby Parker closed the Oct. 4 session at $15.52. However, Warby’s reference price stood at $40.

Nevertheless, hardnosed contrarians may point to cynicism as to why it’s one of the IPOs to buy. Scientists project that by 2050, nearly half of the world population will have myopia. That’s what I call a massive total addressable market.

Wearable Devices (WLDS)

light bulb on abstract technology background
Source: Thitichaya Yajampa / Shutterstock.com

One of the IPOs to buy that I covered for Benzinga, Wearable Devices (NASDAQ:WLDS) represents a groundbreaking technology firm. Leveraging its Surface Nerve Conductance (SNC) platform, Wearable Devices enables users to interact with their smart devices in an organic and intuitive manner. For instance, rather than gingerly navigating granular menu screens on a smartwatch, the SNC tech basically reads your intentions.

I encourage interested readers to look up the company and see for themselves. Succinctly, Wearable Devices represents the next step in the connectivity continuum between man and machine. Unfortunately, Wall Street doesn’t quite see it that way. While analysts may respect the underlying innovation, WLDS suffered a staggering 62% YTD loss.

To be fair, the red ink isn’t that unusual for other formerly hyped recent IPOs to buy. Still, you’re taking big risks with this one as the discretionary consumer economy may fade. However, one major positive is that the company enjoys conspicuous strengths in its books. For example, Wearable Devices features no debt, which could come in handy in the present deflationary environment.

Forza X1 (FRZA)

A hand touches a digital chart with the text "IPO."
Source: Shutterstock

Another one of the top speculative IPOs to buy is Forza X1 (NASDAQ:FRZA) drew early attention because in a way, it’s an electric vehicle company. However, the focus here is on electric boats. Immediately, the narrative also attracts criticism because boating represents a very expensive practice. Only the affluent need apply and that narrows the total addressable market.

Still, the fundamentals may support Forza because of the clean mobility implications. “According to data compiled by Statista.com, greenhouse gas emissions from ships and boats in the U.S. amounted to 32.3 million metric tons of carbon dioxide equivalent (MtCO2e) in 2020.” While emissions in this category fell 31% from 1990, much work needs to be done. Thus, Forza may play some role in this arena.

Of course, only battle-hardened speculators should consider FRZA as one of the IPOs to buy now. Since the start of this year, FRZA tanked 73%. The good news here is that wealth metrics increased for the top 1%. I’ll let you decide if that’s a good enough reason to take a shot.

Rocket Lab (RKLB)

The sun cresting over the curvature of the Earth
Source: muratart / Shutterstock.com

As many science-fiction movies will tell you, space represents the final frontier. According to Wall Street, though, it’s also a very lucrative frontier, thus establishing the bullish case for Rocket Lab (NASDAQ:RKLB). An aerospace specialist, Rocket Lab provides launch services. Not only that, analysts seem attuned to the opportunity inherent in RKLB stock.

First, let’s set up some background data. According to UBS, the broader space economy will command a valuation of $926 billion by 2040. Morgan Stanley upped the ante, projecting a valuation of $1.1 trillion in the same forecasted period. Bank of America may be the most bullish, projected $2.7 trillion by 2045.

Therefore, it’s not surprising that Morgan Stanley and Stifel Nicolaus set a price target for RKLB stock of $12 and $15, respectively. The problem? Shares plunged 62% for the year so far, bringing the price tag down to $4.54.

On the speculative end, Rocket Lab represents truly massive upside if it can hit projected per-share targets. Again, I’ll let you decide if the discount is enough to call RKLB one of the IPOs to buy.

Bumble (BMBL)

A photo of a couple on a date in a restaurant.
Source: VGstockstudio/ShutterStock.com

It’s confession time. While innovative dating app Bumble (NASDAQ:BMBL) may appeal to some investors because of its relevant social profile, I’m not one of them. For full disclosure, I posted my reasons for why BMBL stock presents significant risks in a TipRanks article. If you look at the publication date (Aug. 18) versus the price of Bumble share at time of writing (Oct. 4), you can see I was right to be concerned.

However, given the recent steep discount, could BMBL stock be one of the speculative IPOs to buy? In my TipRanks article, I did mention that pent-up demand for social connections may drive demand. After all, pent-up demand sparked the retail revenge and revenge travel phenomena.

My main concern is deliberate limiting of the total addressable market. As you may know, Bumble encourages people who identify as women to make the first move. From a social perspective, I think it’s wonderful that a company challenges social norms. On the other hand, it’s a risky move in a deflationary consumer market.

However, if BMBL aligns with your ideologies, it might be worth a look at the current discount.

Applied Blockchain (APLD)

Crypto coins on a phone screen showing stats for various cryptocurrencies.. Cryptos to Watch
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On paper, Applied Blockchain (NASDAQ:APLD) bills itself as a “builder and operator of next-generation datacenters across North America.” Basically, the company specializes in mining cryptocurrencies and that’s where the problems start. With the underlying digital asset sector suffering a catastrophic collapse since around Nov. 2021, APLD stock suffered immensely.

To be fair, Applied Blockchain represents a victim of unfortunate timing. When it made its public market debut last year, circumstances looked very auspicious for APLD stock. Now, it’s increasingly difficult to make a case for APLD being one of the IPOs to buy. Fundamentally, if crypto sentiment falls, the narrative for mining an asset base that consistently loses value isn’t conducive for profitability. It’s really just a math problem.

Not surprisingly, then, APLD stock suffered a mindboggling loss of 93% YTD. That’s a warning for most investors to stay away. However, if you have a long, patient view of the crypto sector, you could pick up some APLD on discount. Remember, though, this is only for gamblers. Do not invest more than you can afford to lose.

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On the date of publication, Josh Enomoto 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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

Article printed from InvestorPlace Media, https://investorplace.com/2022/10/7-struggling-ipos-to-buy-for-the-long-term/.

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