Payments startup Marqeta is about to get $12B valuation in its US initial public offering (IPO), on a boom in online shopping and food-delivery transactions during the COVID-19 pandemic.
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- Detailed instructions how to participate in Marqeta (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 and J.P. Morgan in Marqeta 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 Marqeta IPO
With Marqeta, the businesses can offer Visa and MasterCard product to its customers without working with traditional banks. This part is covered by Marqeta, which works with Sutton Bank of Ohio and MetaBank, among others.It also markets technologies, which can help detect potentially fraudulent activity during money transfers.
Marqeta works in the US, Canada, EU, and APAC; in 2020, it enabled issuing 140M cards. Its customer base includes such renowned tech startups as Square Inc, a payment company, Uber Technologies Inc, a taxi-like service, and Instacart, a grocery delivery app.
Marqeta sees its potential marker at $45T in 2021, and around $70T to $80T by 2030. Marqeta's earnings are growing steadily, having doubled in 2020 compared to 2019.
- Exchange: Nasdaq (trading as MQ)
- Market Cap: $11,665B
- Earnings, in 1Q21: $108M
- EBIT, in 1Q21: - $10M
- Net Profit, in 1Q21: - $13M
- Net Debt, in 1Q21: 0
How to Buy Marqeta 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 Marqeta 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 Marqeta shares when the company goes public via a commission-free trading app like eToro.
🚨 Detailed Instructions How to Participate in the Marqeta IPO before public trading:
Below we share the instruction how to participate in the approaching Marqeta IPO using Freedom Finance (Freedom24 platform). This marketplace is chosen as an example because Marqeta is already listed there.
- Pros: almost all high-profile IPOs are available for participation via Freedom Finance, no eligibility requirements, no number of previous trades needed and low minimum investment amount for participating in an IPO.
- Cons: the user interface of the platform is a bit outdated.
* 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 Marqeta 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.
You can also check on stock advisor services like Motley Fool, Zacks, Morningstar etc, if their analysts have written a review about the upcoming IPO you're interested in. Read more
When is the Marqeta IPO date?
June 7, 2021
What is Marqeta IPO price range?
$20 to $24 per share
How to Invest in Marqeta after the IPO date (opening price)?
After the IPO you can buy Marqeta stocks via Freedom24 or eToro on the first trading day.
In what currency Marqeta IPO and post-IPO shares will be traded?
The Marqeta IPO and stock trading currency will be USD.
If you have funds in another currency the cheapest way to convert your currency is to use the mid-market rate (that’s the one you’ll find on Google) which can be done via a fintech service like Wise. Banks may add hidden markups to their exchange rates - charging you more without your knowledge. And if they have a fee, they charge you twice. Wise never hides fees in the exchange rate.
What is the Marqeta (stock symbol)
The stock ticker for Marqeta will be MQ
Marqeta Registration Statement on Form S-1
Marqeta Registration Statement on Form S-1
Sources used: Reuters, TechCrunch
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