Shares of Coupons.com Inc. (NYSE: COUP) soared more than 102% today (Friday), after the company began trading publicly on the New York Stock Exchange this morning.
COUP stock opened its first day of trading at $27.15 and reached $32.45 this afternoon. That $27.15 opening price was up from the company's offer price of $16 per share.
In the initial public offering, Coupons.com raised $168 million by selling 10.5 million shares. Analysts had projected last week that COUP's offer price would be between $12 and $14 per share.
Today's surge has lifted the market value of the company to approximately $2.2 billion.
Coupons.com was founded in 1998, and as its name suggests, provides digital coupons to its customers. More than 2,000 brands and 700 consumer packaged goods companies use COUP's platform to provide discounts to their customers.
The 2014 IPO market has been flooded with 40 initial public offerings year to date, and the triple-digit gain today from COUP makes it one of 2014's biggest winners so far.
But that doesn't necessarily mean investors should start running to the stock now...
How to Play Coupons.com (NYSE: COUP) Stock
The company generated $168 million in revenue in 2013, which was 50% higher than in 2012. The company has also reported that transactions increased by 43% in 2013, to a total of 1.3 billion.
While the top-line numbers are growing, COUP did report a loss of $11.2 million in 2013. In fact, the company has reported a loss in each of the previous five years.
The bottom line has been unspectacular in recent years, but the company has been paring its losses. In 2012, COUP's losses totaled $59 million - so it's headed in the right direction. In Q4 of 2013, the company reported a profit of $1.5 million.
Clearly, investors wanted in on that growth today.
And while investors who jumped in before Coupons.com hit the market doubled their initial investments, retail investors need to take several factors into consideration before jumping in...
Investing in IPOs can be very difficult for retail investors, and most are left buying in after the company hits the market. Companies and their underwriters will typically save shares for wealthy institutional clients who get to buy massive amounts of stock at the best price.
That leaves retail investors buying after the stock price has already popped, which can be risky...
A retail investor who bought in at COUP's opening price today of $27.15 missed out on nearly 70% of the gains COUP posted today.
If COUP pares its gains in the coming days and drops to, say, $25 per share, today's retail investors in Coupons.com will report losses of 9%. Meanwhile, the well-connected IPO investors will still have gains of 56%.
Those looking to get in on Coupons.com stock should wait out the initial volatility of the stock until it comes back down closer to its offer price. There may be a good point to jump in on the stock if it falls, but with COUP up 100% in just a few hours, now is not that time.
Did you get in on COUP stock before it went through the roof? Which IPO will be the next triple-digit winner? Give us the scoop on Twitter @moneymorning using #IPO.
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Coupons.com Shares Nearly Double in Debut