Alkami Technology – a provider of cloud-based digital solutions for banks, is aiming to raise $141M in its initial public offering (IPO) that could value the company at more than $2B, in accordance to the press release on April 5, 2021.
Alkami Technology got a boost during the COVID-19 pandemic, when online banking services and platforms soared in popularity. As of now, there are over 160 financial institutions that use Alkami's services, while the company's market cap amounts to $2.10B.
- Detailed instructions how to participate in Alkami Technology (pre-IPO, offering price) see below👇
What is an IPO and how it works
IPO is a process of offering shares of a private corporation to the public in a new stock issuance. Why go public? The primary benefit of going public is easier access to capital.
To go public, a company must have a track record of growth and other favorable results and hire an investment bank (Goldman Sachs, J.P. Morgan and Barclays in Alkami Technology case) to come in and underwrite the IPO. The underwriters also performed due diligence and verified financial information and business model.
Once the paperwork done, the company sells the stock to institutional investors. When the initial block of shares has been sold, the company with underwriters' help sets an initial price and date for the stock to begin trading on a stock exchange.
Company Profile and Financial Indicators before Alkami Technology IPO
Backed by investors including General Atlantic and D1 Capital, Alkami provides a cloud platform through which banks and credit unions can design their own digital offerings for retail and business customers. Alkami's customer base includes various banks and credit institutions that can use the platform to build offers for their retail and institutional clients. This is especially handy when a company does not deem it feasible to have an in-house development team.
Alkami services are subscription based, which makes it a SaaS. The company caters to 160 clients, most of them having long term agreements with an average of 70 months; this guarantees a stable cash flow. Alkami's average annual growth from 2018 to 2020 reached 53%.
- IPO Size: $141M
- Market Cap: $1,95B
- Earnings, in 2020: $112.1M
- Net Profit, in 2020: -$51.4M
How to Buy Alkami Technology Stocks Before the IPO (Offering Price)
In the past, IPOs as highly profitable investments were available only to the privileged customers of the leading brokerage firms and it was challenging for retail investors to gain access. You couldn't buy shares paying the price set by the company and you had to wait until the shares actually start trading on the public stock market at whatever stock price supply and demand allows.
Technologies and marketplaces changed the rules of the game, now regular investors can get pre-IPO shares. To participate in Alkami Technology IPO you need to use an IPO investing app like Freedom Finance (NASDAQ: FRHC), TD Ameritrade or Fidelity. They give its customers access to IPOs and secondary offerings through their existing brokerage account. Also you can buy Alkami Technology shares when the company goes public via a commission-free trading app like eToro.
🚨 Detailed Instructions How to Participate in the Alkami Technology IPO before public trading:
Below we share the instruction how to participate in the approaching Alkami Technology IPO using Freedom Finance (Tradernet platform). This marketplace is chosen as an example because Alkami Technology is already listed there.
* Freedom Finance services are NOT available to US citizens and residents.
- Apply for a Freedom Finance account — you need to prepare your identity document and a document confirming the address of residence (utility bill). The verification process is very fast, it will take 2 minutes to create your account.
- Deposit your account — to participate in an IPO, your account must have available funds in the amount you send IPO application for.
- 💡 Tip: It's recommended to deposit your account in advance. Often the exact IPO date is undefined until the last day. You may have a short notice for participation and account deposits also takes time for processing. Also, sometimes Freedom sends last-minute IPO offer when you have 2 hours to participate.
- Submit a request to participate in the IPO — when applications are open select Alkami Technology and click Participate in the IPO > input the amount you want to invest > Send your application. Note: Before the book closing, a request can be withdrawn. At the time of the book closing, 1 day before the start of the exchange trading, the specified amount will be blocked on the account.
- Wait for allocation — The actual number of stocks purchased during an IPO depends on supply and demand. The higher underwriter reserves the right to partial execution of collective applications. So if the demand is high you may get less than you applied for. Of course, you will only pay for the shares purchased. The rest of the funds will be returned to your account.
- Start of trading — With the beginning of the public trading on the stock exchange, the purchased shares will appear on the account and a lock-up period will start — a 93-day period of prohibition on sale. You can’t sell stocks, but you can track their current value and growth indicators in your personal member area and a trading terminal.
- Closing your trade — At the end of the 93 days lock-up period, you will be able to manage your stocks at your discretion — leave in the portfolio or sell and withdraw money or transfer the stocks to another depository/ broker in your name. This can be done in your account by clicking the ‘Sell’ button next to the name of the security. In this case, a commission of 0.5% of the amount of the sale transaction is charged.
Is investing in IPOs profitable?
Not always. The average return at the end of the lock-up period is 72%, past IPOs data.
When is the Alkami Technology IPO date?
April 12, 2021
What is Alkami Technology IPO price range?
6M shares priced $22 to $25 per share.
How to Invest in Alkami Technology after the IPO date (opening price)?
What is the Alkami Technology (stock symbol)
The stock ticker for Alkami Technology will be ALKT