On the Spotify IPO date, retail investors could make a small profit by directly investing in Spotify stock. However, there’s a way to make a triple-digit profit we will show you in just a bit.
In fact, we’ve found one little-known stock that could bring returns as high as 156%.
[ad#Google Adsense 336×280-IA]While anxious investors think they can cash in on new IPOs, here’s what happened on the March 2 Snap Inc. (NYSE: SNAP) IPO date.
Shares of SNAP opened at $24 per share and closed at $24.48 per share. You didn’t lose money that day if you bought in at the opening price, but you aren’t going to brag about the 2% profit you made.
There’s no predicting what Spotify stock will do on the first day. But any gains made on the first day of trading for the average investor will be measly compared to the 156% profit opportunity we will show you shortly.
Best of all, by bypassing the actual IPO stock, you’ll also avoid a potential stock price plummet after the initial hype dies down.
The SNAP stock price climbed to an all-time high of $29.44 on March 3, but then fell to an all-time low of $18.90 on March 17.
For investors who bought in at the high price and sold out of panic, that’s a loss of more than 35% in just eight trading days.
But with each IPO, there’s a little-known secret that the mainstream media will never discuss.
That’s why today, we’re exposing the secret private companies don’t want you to know about. CEOs and big banks that underwrite public offerings aren’t going to like this because it means less money in their pockets.
And since there’s already a lot of hype around the Spotify IPO date (without a final date even set), a lot of investors will buy Spotify stock solely on the promotion of the IPO. Just like Snap, they’ll likely be disappointed with their returns.
We don’t want that to happen to Money Morning readers.
With this secret way to play the Spotify IPO, you could make more money faster while completely avoiding the volatile price swings of an IPO…
Make 156% in Profits Before the Spotify IPO
One of the best ways to play an IPO is buying stock of the company’s suppliers.
That’s because the suppliers are already established businesses, which means you won’t have to deal with the volatile price swings of a public offering. And because companies use IPO money to grow their businesses, they will need to pay suppliers more to keep up with the growth.
Best of all? The supplier is still getting paid, whether the IPO is a hit or a flop.
However, it’s not easy to find a private company’s suppliers. In fact, if you search for “Spotify suppliers” on a search engine, you aren’t going to find any helpful information on the first page.
However, I was able to find a major supplier for Spotify after some intense research…
In California, there’s a little-known company called Hortonworks Inc. (Nasdaq: HDP) that is one of Spotify’s major suppliers for data management. With a market cap just over $600 million, most investors haven’t heard of this tech company.
But that’s okay, because knowing about it now could make Money Morning readers profits of up to 156%…
Hortonworks creates, distributes, and supports enterprise data management software solutions. Its Hortonworks Data Platform allows its customers to collect, store, process, and analyze existing data.
On top of all this, the data management expert even offers the Hortonworks Data Cloud for Amazon Web Services, which analyzes and processes data.
And because of its expertise, Hortonworks has an impressive client list that includes Bloomberg, eBay Inc. (Nasdaq: EBAY), and Expedia Inc. (Nasdaq: EXPE).
As of March 2017, 67% of the analysts covering HDP recommend it as a buy. That’s up 10% from the 57% of analysts who recommended it a buy in November 2016. And according to FactSet, the HDP stock price has an average one-year price target of $15.18.
From today’s opening price of $9.36, that’s a potential profit of 62.17%.
But that estimate is conservative. Northland Securities has a one-year price target of $24 per share, which means HDP shareholders could profit as much as 156% in the next year.
— Jack Delaney
Source: Money Morning