Stripe Stock IPO: If & When They'll Go Public

Updated: May 23, 2022Written By: Kent ThuneReviewed By:

Stripe Inc is a financial services company that provides online payment processing for businesses. Stripe's preparation to take its stock public, and its projected valuation of $95 billion, make it among the top prospective IPOs for 2022. Learn more about Stripe's business and how to buy the stock if it goes public.

Making payments the simple way

Jay Yuno/E+ via Getty Images

What Is Stripe?

Stripe's (STRIP) software as a service and application programming interfaces enable businesses to accept payments, send payouts, and manage their businesses online. Stripe also provides tools enabling users to buy and store cryptocurrency and NFTs.

Dually-headquartered in San Francisco and Dublin, Stripe was founded in 2013 by Irish entrepreneurs, John and Patrick Collison. A few of the large companies that Stripe provides services for include Ford Motor Company (F), Spotify (SPOT), and Twitter (TWTR). Early investors in Stripe include Elon Musk, Peter Thiel, Sequoia Capital, and Fidelity Investments.

Will Stripe Go Public?

Stripe, Inc is currently a private company but it took its first step toward going public in July 2021. If Stripe goes public in 2022, it may be through a direct listing, rather than a traditional IPO, because it doesn't need to raise additional capital to fund its operations.

Note: A direct listing IPO is an initial public offering where a company's shares become publicly traded without going through a formal IPO. In a direct listing, the company does not issue any new shares and doesn't hire an investment bank to underwrite or promote the deal. They sell only existing shares of the company instead. This reduces the regulatory requirements, allowing for a quicker process.

Prospective Stripe IPO Date

As of May 20, 2022, there was no IPO date set for Stripe. While a 2022 IPO is possible, the IPO market slowed over the past year, indicating that many startups may be delaying IPO plans until economic and market conditions improve.

Projected Stripe IPO Valuation & Stock Price

If and when Stripe goes public, it would become the most valuable U.S. technology startup, based on its 2021 projected valuation of $95 billion. Since Stripe is a private company, its current valuation and price are not known although, Fidelity Investments, who owns shares of the company, marked Stripe's price at $36.96 at the end of March 2022. (Source: masterjitips.com)

Note: Once trading begins on the secondary market, IPO stocks often trade at a significantly different value than their original price. Investors considering the purchase of Stripe Inc stock when it goes public may discover that the market price is significantly different than the initial listing price.

How To Invest In Stripe Stock: 7 Steps

As of May 20, 2022, Stripe Inc was a private company. If it goes public, investors will be able to buy shares of STRIP stock after its IPO in the same way they may buy stocks of other publicly traded companies.

Note: This report is not a recommendation to purchase stock in Stripe Inc, or any other security. For investors who are interested in pursuing a potential investment after a potential Stripe IPO is complete, the following steps for buying stocks will be helpful.

Step 1: Understand Stripe's Financial History

As is the case with many startups, there is not much public information about Stripe because it is a private company. However, once Stripe files for its IPO, investors can look at the company's financial history and other pertinent data on their form S-1, which is a required SEC filing.

Step 2: Assess Stripe's Financial Reports

When Stripe is a publicly-traded stock, it will be required to publish its financial statements every quarter. These statements can help investors learn about a company's cash flow trends, capitalization structure and financial position. The three main financial statements include the income statement, balance sheet and cash flow statement.

Step 3: Evaluate Stripe's Potential Compared To Your Investment Horizon

Before buying stocks or other investment securities, investors should keep in mind their tolerance for risk and time horizon. For example, a swing-trader may attempt to take advantage of short-term momentum in price growth, whereas a long-term investor may prioritize strong financials higher than short-term price movements.

Step 4: Select A Brokerage

Investors who do not have a trading account will need to first select a brokerage firm. The account types commonly used for trading stocks include a standard brokerage account or a retirement account like an IRA.

Investors who want to manage their own portfolio for a reduced cost may choose a discount brokerage company. Those who prefer advice for a fee can open a trading account with a full-service broker.

Step 5: Choose An Investment Size & Strategy

Investors who have decided to buy shares of Stripe stock, if it goes public, should consider how many shares to purchase and what investment strategy to adopt for their new position. The investment strategy will guide the investors' holding period and exit strategy.

Many investors choose to buy and hold stocks for long periods of time, such as several months or years. Examples of basic investing strategies include swing trading, short-term trading or a long-term, buy-and-hold strategy.

Step 6: Choose an Order Type

Investors have a number of choices for placing orders to purchase stocks, including the following:

  • Market order is the most common type of order. It executes trades immediately and at the best transaction price available at that time.
  • Buy limit order: When placed, investors specify a maximum price to be paid for the shares.
  • Buy-stop order is an order to buy at a specified price. That price is called the "stop price", which is always higher than the current market price. In the case of buy-stop, the stop price will be lower than the current market price.

Step 7: Submit The Trade

After investors have funded their account, they may decide an investment size and order type, then submit the trade to place an order. If the trade is a market order, it will be filled immediately at the best available transaction price.

However, if investors submit a limit order or stop order, the investor may have to wait until the stock reaches their target-price or stop-loss price for the trade to be completed.

Bottom Line

Stripe Inc is a privately held financial services company that has taken steps toward an initial public offering but an IPO date has not yet been scheduled (as of May 2022).

This article was written by

Kent Thune profile picture
628 Followers
Kent Thune, CFP®, is a fiduciary investment advisor specializing in tactical asset allocation and portfolio management with a focus on ETFs and sector investing. Mr. Thune has 25 years of wealth management experience and has navigated clients through four bear markets and some of the most challenging economic environments in history. As a writer, Kent's articles have been seen on multiple investing and finance websites, including Seeking Alpha, Kiplinger, MarketWatch, The Motley Fool, Yahoo Finance, and The Balance. Mr. Thune's registered investment advisory firm is headquartered in Hilton Head Island, SC where he serves clients all around the United States. When not writing or advising clients, Kent spends time with his wife and two sons, plays guitar, or works on his philosophy book that he plans to publish later in 2022.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.