Adyen pennant forming, ugly IPO

14 de jun. de 2018

Brand new IPO stock ADYEN is forming a pennant. It can go either way from this point so do only trade it after a breakout. I'm not planning to trade Adyen in the near term because there are big risks involved:

• Newly listed stocks can do wild things, so use a tight stop loss.
  
• The free float of this stock is very low. All shares are allocated to institutional investors at the time of subscription. They had to sign a contract which states that they want to hold the shares for several years. Only a small part of the shares can be freely traded (<15%). The price can therefore go up but also go down quickly.
  

If I were a value investor I would definitely not trade this stock because of the low free float. I think that private investors, in particular, are now pushing up the price and will get trapped with expensive shares.

Disclaimer: this reading is intended to explain the risks and high valuation involved with this stock. This is absolutely no investment advice.
General information: Adyen is a global payment company that allows businesses to accept e-commerce, mobile, and point-of-sale payments. Adyen has more than 5,000 customers and is listed on the stock exchange Euronext.