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If nothing else, remember the name CrowdStrike…
This company will soon hold the most important cybersecurity IPO in 2019…
Right now, the cybersecurity industry is in the midst of incredible growth.
In 2018, cybersecurity was valued at $137.8 billion globally. In the next four years, Money Morning Defense and Tech Specialist Michael Robinson expects the value to go up to $231.9 billion.
That's 68% industry growth in just four years.
And that's just the start.
By 2021, Cybersecurity Ventures expects cybercrime damages will reach $6 trillion.
And that growth should continue for years. New regulations are always popping up, like the EU's new Global Data Protection Regulation (GDPR) from 2018, which requires…
- Companies to hunker down on protecting people's personal data.
- Getting consent for data processing.
- Protecting people's privacy with anonymous data collection.
- Notifying people of data breaches.
- Safely delivering data across different borders.
- Companies overseeing GDPR compliance with data protection officers.
Not to mention the massive security breaches making news almost every week.
Just look at Facebook Inc.'s (NASDAQ: FB) data scandal from 2018.
Or the 2017 Equifax Inc. (NYSE: EFX) data breach that released the information of 143 million people. In 2018, 500 million Marriott International Inc. (NASDAQ: MAR) accounts were leaked. Within the first three months of 2019, 2 million government officials' information has been hacked and stolen from the Dow Jones.
We're at a point in time when cybersecurity isn't a luxury, but a necessity.
All this industry growth underscores why CrowdStrike is about to hold one of the most important cybersecurity IPOs of 2019…
Why This Cybersecurity IPO Will Be So Important
It may not be a household name, but CrowdStrike is already worth billions…
The company was founded in 2012 by two former McAfee executives, George Kurtz and Dmitri Alperovitch. In June of 2018, they raised over $200 million from private investors – putting Crowdstrike at a predicted value of $1 billion.
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In October, the company enlisted Goldman Sachs Group Inc. (NYSE: GS) to help with its IPO.
Beyond that, Crowdstrike processes over 1 trillion security threats per week globally.
That being said, there are some risks…
While CrowdStrike shows huge promise (and potential massive profits), there's often a lot of volatility for new IPOs.
Investing in IPOs can be a rigged game. Let's say institutional investors are offered shares of an IPO at $20. These are the people and banks who are putting down tens of millions of dollars.
Afterward, the cybersecurity IPO becomes available to the everyday investor – people like you and me. We go in, buy it at $30, and the demand pushes the value up to $40. Once the IPO lock-up period ends, those big original investors sell. The stock drops down to $25, and all of a sudden we're at a $5 loss per share, while they still pocket a $5 gain…
This is incredibly common.
That's why we recommend keeping an eye on CrowdStrike stock once it starts trading, but not buying immediately. Wait six months to a year, even. Check out the first two earnings reports. If EPS and revenue are both growing, then you can feel comfortable investing.
However, we have an investment we can recommend right now that has massive profit potential…
This Is the Best Way to Play This Cybersecurity IPO
About the Author
Daniel Smoot is a Baltimore-based editor who helps everyday investors with stock recommendations and analysis. He regularly writes about initial public offerings, technology, and more. He earned a Bachelor's degree from Towson University.