The Stitch Fix IPO Is Friday, November 17 - Here's a Better Profit Strategy

The Stitch Fix IPO is scheduled for this Friday, Nov. 17, 2017. But we have a better strategy for profiting from the online retail sector...

Stitch Fix IPOBy using our strategy, you won't have to deal with volatile IPO price swings, as you'll own shares of some of the most established and profitable online retailers instead. We don't want our readers to lose 50% of their investment, like some Snap Inc. (NYSE: SNAP) shareholders already have since its IPO.

In fact, some shareholders have already netted gains of 35.43% so far in 2017. In comparison, the Dow Jones Industrial Average has climbed just 18.75% during the same time.

But before we get to this profit opportunity, we want to make sure our readers know all the details about the Stitch Fix IPO so they don't get caught in the hype and lose money...

What to Know Ahead of the Stitch Fix IPO Date

Stitch Fix wants to sell its stock between $18 and $20 per share at its IPO offering price, according to The Wall Street Journal.

That price is what insiders, like hedge funds and investment banks, will pay, while retail investors will have to wait to buy Stitch Fix stock, normally at an inflated price.

For example, Snap Inc. set its IPO offering price at $17 per share. When retail investors were finally able to buy Snap stock on March 2, they had to pay a 41% markup of $24 per share.

If you felt like you missed out on profits from the Snapchat IPO because the mainstream media reported the SNAP stock price climbed 41% in a day, they weren't talking about profits for retail investors.

But even now, Snap has lost hedge funds' and big banks' money, as it opened today at just $12.50 per share.

That's a 26% drop from the IPO offering price and a 47% loss from the price Snap stock first opened at for retail investors.

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Because of how prices can drop so quickly and the way IPOs are structured to reward inside investors, we don't recommend buying Stitch Fix stock when it goes public.

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"I generally tell retail investors to avoid buying an IPO at the open because the insiders have already made all the money available at the debut," Money Morning Director of Technology & Venture Capital Research Michael A. Robinson told me.

However, there's still a profit play in the online retail sector that has already netted some shareholders 35% returns this year...

Forget the Stitch Fix IPO, Here's Where to Invest Your Hard-Earned Money

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While we recommend avoiding the Stitch Fix IPO, we still see a profit opportunity in online retail that's much safer than owning Stitch Fix stock: Amplify Online Retail ETF (Nasdaq: IBUY).

IBUY holds a diversified group of publicly traded companies that generate 70% or more of their revenue from online or virtual sales.

Some of its most well-known holdings include Amazon.com Inc. (Nasdaq: AMZN), eBay Inc. (Nasdaq: EBAY), and Alibaba Group Holding Ltd. (NYSE: BABA). Instead of owning shares of a company that just sells clothes, you can own three e-commerce giants, each with market caps over $30 billion.

You can also own IBUY for a fraction of what a regular share of AMZN or BABA would cost you, while still profiting from these companies.

As the prices of EBAY, AMZN, and BABA climb, so will IBUY.

Stock Symbol Price per Share as

of Nov. 16

YTD Return
IBUY $36.54 35.58%
AMZN $1,130.16 51.60%
BABA $183.31 111.51%
EBAY $35.37 20.14%

So far, in the last 12 months, the IBUY stock price has climbed 35.58%. In comparison, the Dow Jones Industrial Average has climbed just 18.78% during the same time.

And because the stock prices for AMZN, BABA, and EBAY are expected to go higher in the next 12 months, there could be even more gains are on the way for IBUY shareholders.

According to FactSet, Loop Capital Markets projects the AMZN stock price will climb 15.02% to $1,300 in the next 12 months. An unnamed brokerage firm also projects the BABA stock price will climb 33.65%, to $245 per share, in the next 12 months.

For the EBAY stock price, Wells Fargo Securities projects it will climb 27.22% in the next 12 months, to $45 per share.

The Bottom Line: IPO prices can have volatile price swings in the first few months of trading. Instead of owning a risky IPO, a safer way to potentially profit from the online retail industry is by owning shares of IBUY.

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