Later today Cerebras will be IPO-ing. Let’s have a look at the history of recent hot tech IPOs to learn more about typical price action post IPO.
Snowflake was extremely hot. Whereas the initial range was set at $75-$85, the IPO was finally priced at $120. Shares opened at $245 and had wild swings on the day. However, as the hot money exited, shares traded lower in the following week. In this case, investors who bought the shares at the open made a so-so call—as this was roughly the average price level over the following two months:
Astera Labs was another hot IPO. The initial range was $27-$30, the IPO priced at $36, and the shares opened at $52. In the following days, shares rallied, after which we saw share price contraction during the following weeks. However, shares continued to trade above price levels on the day of the IPO. In this case, investors who bought when the shares opened made a great call, with shares still trading 38% higher two months later:
Finally, we have Arm. This was a weaker IPO than the other two, as Arm only priced at the top of its range at $51. The shares opened at $56 and rallied strongly on the first day but during the second trading day, a sell off started. Although investors who bought at the open still didn’t do that badly, losing only 5% in market value over the next two months. Again, buying at the open wasn’t a great call, like in the Snowflake IPO, although the damage was limited.
Next, we will go through our thoughts on the Cerebras IPO and share price levels we would be interested in.