What Is the Boring Company?

The Boring Company builds tunnels. If that sounds, well, boring, think again. Think of it as a new take on an old approach to urban transportation.

The Boring Company is inextricably linked to its founder, Elon Musk, and fittingly for a Musk company, it appears to have been conceived on Twitter, while Musk was stuck in traffic.

Musk officially founded The Boring Company on that same day – Dec 17, 2016 – so he probably didn’t come up with the idea while writing those tweets. It’s not the first time he’s complained about traffic, though, and it is plausible that his frustration with traffic gave birth to The Boring Company.

The Boring Company is focused on building tunnels. Tunnels have been around for centuries, but Musk’s vision was to bring tunneling – or boring – into the 21st Century, deploying new technology to build faster, safer tunnels for transporting people and freight.

The mission is to “solve traffic, enable rapid point-to-point transportation, and transform cities.

The Boring Company puts it this way:

To solve the problem of soul-destroying traffic, roads must go 3D, which means either flying cars or tunnels are needed. Unlike flying cars, tunnels are weatherproof, out of sight, and won’t fall on your head.

Tunnels minimize usage of valuable surface land and do not conflict with existing transportation systems. A large network of tunnels can alleviate congestion in any city; no matter how large a city grows, more levels of tunnels can be added.

The Boring Company

The Boring Company pursues these goals with two products.

Loop

Loop is “all-electric, high-speed underground public transportation”. It is not a rail system, but more a highway in a tunnel. Passengers board individual vehicles (provided by Tesla, of course) and are brought to their destination station with no intermediate stops.

A loop system is already operating at the Las Vegas Convention Center (LVCC), with three large stations. The system has transported up to 26,000 passengers per day, with an average ride time of under two minutes and an average wait time of 15 seconds. It is designed to handle up to 4,400 passengers per hour.

The larger Vegas Loop project was approved in October 2021, and will expand the LVCC loop to a 29-mile network with 51 stations, capable of handling 57.000 passengers per hour.

The Boring Company plans to use autonomously driven Teslas operating at up to 150 miles per hour, but the current operation in las Vegas involves human drivers and speeds closer to 35 mph. The limits are imposed by Nevada regulators.

Prufrock

Prufrock is The Boring Company’s purpose-built tunnel borer. It can dig a 12-foot diameter tunnel at 1 mile a week and is designed to “porpoise”, meaning it can enter and leave the ground itself, without having to be placed in or extracted from a pit.

Prufrock enables continuous tunneling, with precast segments placed as the machine bores.

The system allows the Boring Company to offer tunnels specifically optimized for utility, freight, pedestrian, and other uses, with a range of surfaces, lighting, ventilation, fire safety systems, and CCTV coverage.

Product offerings include project engineering, environmental review, and permit acquisition.

Hyperloop

Hyperloop is a proposed high-speed transportation system that would have passengers traveling in electric pods at speeds that could exceed 600 miles per hour. The system would use Boring Company tunnels.

A test track has been built and test pods have reached speeds up to 288 mph, but there is no indication of when the system will be deployable and no assurance that it ever will be.

The Boring Company has a number of test projects in progress, but the Las Vegas Loop project is its only revenue-generating enterprise as of October 2022.

When Will the Boring Company Hold Its IPO?

The Boring Company has not filed for an IPO and has given no indication that it is planning an IPO. The Company has adequate funding and has no immediate need to go public.

If you want to buy Boring Company stock you’ll have to look for private shares on the pre-IPO market If you find shares you’ll have to accept that you may have to wait for a fairly long time before those shares are publicly tradeable.

There is no assurance that the Boring Company will ever hold an IPO or that the shares will be publicly traded.

What Do We Know About the Boring Company’s Fundamentals?

Quick answer: almost nothing.

The Boring Company has not filed an IPO prospectus. It is not a subsidiary of a publicly traded company, so it’s not required to disclose any financial information.

The Boring Company has one active project, the LVCC Loop, and one project in progress (the Vegas Loop). Any revenues would come from these projects. The LVCC Loop project cost roughly $47 million, but it’s not clear how much of this was booked as Boring Company revenue.

Ongoing revenues for the LVCC project are heavily constrained by Nevada regulators, who have limited the speed and the number of vehicles deployed and prohibited the use of autonomous driving technology.

TechCrunch reports that The Boring Company receives $167,000/month to keep the LVCC project working, with additional payments based on the number of passengers carried and the number of events served. The Company pays the drivers, security staff, and other employees from these amounts.

Continued constraints on capacity could limit the revenues drawn from the project.

One source claims that revenues are $2.7 million annually, without citing a source.

Multiple sources state that The Boring Company has around 200 employees.

Given the minimal amount of information available, an investment in The Boring Company has to be regarded as highly speculative. Most people seeking to invest will be drawn mainly by Elon Musk’s reputation.

The Boring Company’s Financing

The Boring Company has raised $908 million in three funding rounds.

The most recent funding round, in April 2022, left the company valued at $5.7 billion.

How Can I Buy Boring Company Stock?

Boring Company stock does not trade on any public exchange. It is a privately held company. You will not be able to buy shares in a conventional broker transaction until after the Company holds an IPO, assuming that it does.

It may be possible to acquire Boring Company stock from pre-IPO marketplaces that acquire shares from early investors or from employees who have received stock options as part of their compensation.

How to Buy Boring Company Stock

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Pre-IPO Secondary Markets

These pre-IPO marketplaces make privately held shares available to selected investors. There is no guarantee that Boring Company stock or shares in any other privately held company will be available at any given time. These marketplaces may have investor qualifications and other requirements.

• Forge Global is now the world’s largest private share marketplace, since its merger with Sharespost. There’s a $100,000 minimum investment, and the minimum may be higher for some shares. There may be a qualification process.
• EquityZen acquires pre-IPO shares from early investors and employees who have received stock as part of their compensation. EquityZen states that they cooperate with the companies to assure recognized transactions. There’s a $10,000 minimum investment, with some companies having higher minimums. You will need to meet the revised SEC “accredited investor” criteria.
• Nasdaq Private Market provides access to private-company shares for investors who meet the SEC’s accredited investor criteria.
• EquityBee is a marketplace that allows investors to fund an employee’s stock options in return for a share of the proceeds.

Warning: There are serious risks that come with investing in any pre-IPO shares. An IPO may not take place when inspected. It may not take place at all. That would leave you with shares that could be difficult or impossible to sell at any price. 

Learn more: about pre-IPO investing before considering a purchase. Review this guide to how to buy pre-IPO stock before you start!

Invest in the IPO

If pre-IPO shares are not available or if the minimum purchase or qualification requirements are prohibitive, you can consider investing in the IPO itself.

Most IPO underwriters allocate set numbers of shares to specific brokers for their clients. You’ll need an account with a broker that has a share allocation. You will tell your broker how many shares you want and they will tell you how many you can get. There is no assurance that you will be able to get a share allocation.

Many brokers have requirements for IPO participation, which you will have to meet.

• Charles Schwab requires a history of at least 36 trades and an account balance of $100,000 or above for IPO participation.
• E*Trade has no minimum account balance or trading history requirements for IPO participation. An eligibility questionnaire may be required by the underwriters of the IPO.
• Fidelity allows IPO participation for clients who meet a minimum household asset requirement or are in their Private and Premium client groups.
• TD Ameritrade offers participation in IPOs if they are part of the selling group. You will need a minimum account balance of $250,000 or 30 trades in the last calendar year to qualify for an IPO share allocation.

IPO shares may come with a lockup period, often 60 or 90 days. You will not be able to sell your shares until the lockup period expires.

IPO shares will cost more than pre-IPO shares. That cuts your potential gains, but you’ll also have less risk. If you buy at an IPO you know there will be a market for your shares when the lockup period expires, even if there’s no assurance of profit.

Invest After the IPO

The easiest and safest way to buy stock in The Boring Company is to wait until after the IPO. You can use your usual broker and there won’t be any special requirements or lockup period. You’ll be able to sell whenever you want.

If you buy after the IPO you won’t get in as cheaply as you would with an IPO or pre-IPO purchase. On the other hand, you’ll be able to buy as few or as many shares as you want, and you’ll have a chance to observe the stock’s market reception before you pull the trigger. That’s especially important if the company makes its debut during a generally weak market.

Getting in before the IPO is not a guarantee of quick profit. Not all stocks spike in value after an IPO. Some, even shares in quality companies, may sputter or even drop immediately after the IPO.

If you buy after the IPO you won’t get the rock-bottom prices that you would get from a pre-IPO purchase or the somewhat higher price you’d pay for participating in the IPO. On the other hand, you will be able to gauge the market’s reception to the IPO before you buy. Not all IPOs soar out of the blocks. Some of them crash.

For long-term investors, the price difference between a pre-IPO and a post-IPO purchase may not be large enough to justify the greater complexity and risk of buying early. If you’re in that bracket, a post-IPO purchase is probably the best way to go.

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Are There Any Concerns About the Boring Company?

Any pre-IPO investment carries significant risks. information on the company is often very limited. There’s no assurance that an IPO will ever occur or that there will be a public market for the shares.

On top of those general risks, there are specific risks that go with an investment in the Boring Company:

• The technology is unproven. The LVCC Loop project is operating but at only a fraction of its intended capacity. The Loop system is intended to use Tesla’s autonomous driving technology to provide high-speed driver-free transport, and regulators are not yet convinced of the system’s safety. Failure to gain approval will limit the system’s marketability.
• Safety concerns. Aside from the concerns over autonomous driving systems, regulators have expressed concerns over the possibility of battery fires in tunnels, which would pose hazards for passengers, rescuers, and firefighters. Failure to gain approval or a serious incident would be a huge blow to the Company.
• The uncertain market for tunneling services. The Boring Company’s Prufrock system does not appear to have been deployed on any commercial project, other than those of the Loop system. Forge Global states that “the company has not yet completed any tunnels for public or commercial use”.
• Elon Musk. The charismatic CEO and founder is a huge source of appeal to investors, but he’s also a risk. The Boring Company is dependent on his continued involvement, and dependence on one individual is always risky. Musk’s behavior has at times been erratic and he is involved in large numbers of projects that could be distractions.
• Limited information. Very little is known about the Company’s financials or deals in progress.

These risks are significant, and The Boring Company has to be considered a highly speculative investment even by the standards of pre-IPO companies.

Conclusion

The Boring Company is a fairly unique entry in the private equity market. It is almost alone in its niche: there are many engineering and construction companies that build tunnels, but the Boring Company is the only one specifically formed to improve tunnel-building technology.

There’s a clear demand proposition – traffic is a massive problem in many places – but there is still no evidence that urban planners are going to turn to the Boring Company for solutions to their traffic problems. The limited stock of actual products and the regulatory issues and potential safety concerns faced by its flagship Loop project place this firmly in the speculative category.

If you’re interested in speculative investments and the Musk connection appeals to you, it might be worth looking for pre-IPO shores, though there’s no guarantee of finding them. Just be sure your fully aware of the risks, both of pre-IPO investing in general and of the Boring Company in particular!

The post How to Buy Boring Company Stock in 2024: What You Need to Know appeared first on FinMasters.

Discord is currently a privately held company, which means that shares are not trading on any public exchange. It may still be possible to buy pre-IPO shares in Discord, Let’s look at why you might want to invest in Discord and at some options for investing in Discord stock.

Update: in June 2022 Fidelity, which invests in Discord and other private companies through its Contrafund, slashed its internal valuation of Discord shares from $550.62 to $373.65, a 32% cut. This is not reflected in the Company’s quoted valuation, as is a private, internal valuation from a shareholder.

What is Discord?

Discord is a communication app that enables chat, voice communication, file sharing, and other features. Many apps provide similar capabilities, but Discord has set itself apart with several notable features.

• It works on any platform. You can use Discord on Windows, iOS, Android, Xbox, Playstation, and others. 
• It enables groups and communities. Discord allows private, and public groups called servers, subdivided into channels. Many popular games have their own dedicated servers. Groups of friends can form private servers. 
• Screen sharing and live communications while gaming. You can easily use Discord alongside a game or other app.
• High-quality sound. Discord provides better sound quality than most communication apps. 
• Compatibility with other apps. You can sync Discord with Twitch, Mixer, YouTube, Spotify, Patreon, and other popular applications and integrate them into your communication networks.

All of these features were originally developed to serve the gaming community. Groups of gamers simultaneously play popular games on different platforms, opening up demand for flexible cross-platform communications.

Discord is rapidly expanding into non-gaming markets. Teens that grew accustomed to Discord while gaming are using it for other purposes as well. Many analysts expect that the Discord generation will stay with the app and find new uses for it.

Many professional groups are discovering that Discord provides a useful alternative to Slack, Zoom, and other communication apps.

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When Will Discord Hold its IPO?

Discord has not yet filed IPO paperwork with the SEC. An IPO was expected in early 2022, but it didn’t happen. The Company’s last funding round established a $15 billion valuation, and the IPO is likely to generate significant attention.

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Financing and Growth

Discord has received financing from multiple venture capital firms, including Greylock, IVP, Benchmark, Tencent, Spark Capital, Greenoaks Capital, and Sony Interactive Entertainment. That indicates a high level of institutional interest and belief in the Company.

Institutional financing also raises the probability that Discord will seek an acquisition or IPO. Those institutional investors will be looking for a profitable exit point.

Discord Cumulative Funding, 2012-2021. Source: Owler

Discord has shown continuous growth in users, accelerated by a surge in activity from home-bound gamers during the COVID-19 pandemic. 850 million messages and four billion minutes of conversation are exchanged every day on Discord.

Discord Monthly Users, 2017-2021. Sources: Business Insider, Techspot

Discord revenues, driven primarily by subscribers to Discord’s premium Nitro service, have increased at a similar rate.

Discord Estimated Revenue, 2017-2021. Sources: Forbes, WSJ

Discord is currently valued at $15 billion. The Company is rapidly expanding both its core gaming market and its non-gaming market and increasingly gaining users in the business communication niche. That combination of growth drivers has increasing numbers of investors asking how they can invest in Discord shares.

How Can I Buy Discord Stock?

Discord is still a privately held company. That means it’s not traded on any public exchange. You can’t simply place an order through your broker.

Discord has been targeted for acquisition several times. In early 2021 Microsoft was reportedly considering buying the company for a reported $10 billion.

Shortly after that story broke, the Wall Street Journal and Bloomberg reported that Discord had walked away from the deal and was expected to launch an IPO instead. That means Discord shares may be traded on the open market soon. 

Invest Through a Pre-IPO Secondary Market

If you can invest in Discord shares ahead of the expected IPO, you could be set for a serious gain when the IPO hits. Here are three pre-IPO markets where you may be able to buy Discord Stock ahead of the IPO.

• Forge Global is the world’s largest single pre-IPO marketplace. There’s a $100,000 minimum investment and some shares may have higher minimums and may be limited to qualified buyers.
• EquityZen is an online marketplace that acquires pre-IPO shares from employees, early investors, and other insiders and makes them available to qualified investors. The minimum investment is $10,000 and may be higher for some shares.
• SecFi is a pre-IPO marketplace that specializes in linking employees that want to liquidate their stock options with outside investors. ‎
• Nasdaq Private Market provides access to private company shares for investors who meet SEC accredited investor criteria.
• EquityBee is a private marketplace that allows investors to fund an employee’s stock options in exchange for a share in the proceeds from their eventual sale.

There is no assurance that Discord shares will be available on any of these marketplaces at any given time. You will have to open an account and log in to get specific information on available shares.

It’s a good idea to read up on pre-IPO investing and review this guide to how to buy pre-IPO stock before you start!

Invest in the IPO

Pre-IPO investing is not easy, and shares may not be available. Another option is to invest in the IPO. You won’t get the same price that you’d get in the [re-IPO market, but your risks will be lower. At least you’ll know that the Company will go public and you will be able to dispose of your shares.

Retail investors can participate in IPOs through several major brokers. You will have to meet requirements and you may need to supply information on your finances to meet qualification requirements.

• TD Ameritrade allows account holders to particiate in IPOs where it is part of the selling group. You will need a minimum account balance of $250,000, unless you have made at least 30 trades in the last calendar year. 
• Fidelity customers who are in the Private or Premium groups may participate in IPOs. Others may be able to join if they meet a minimum household asset requirement.
• Charles Schwab allows IPO participation for account holders with an account balance of $100,000 or al least 36 trades in their account history.
• E*Trade has no account balance or trading history restrictions on IPO participation. The underwriter of the IPO will supply a qualification questionnaire.

Companies holding IPOs are making an effort o make more shares available to retail investors. The recent Rivian IPO saw the Company offer shares to retail investors through SoFi. Follow the news on the upcoming IPO for announcements of IPO share allocations for private investors and the brokers that will handle them.

In any case, you will have to request IPO shares from your broker after qualification. There is no assurance that the full amount of your request – or any shares at all – will be allocated to you by your broker.

Invest After the IPO

The most conservative way to buy Discord stock would be to wait for the IPO and buy the shares on the public post-IPO market. You can do this through any brokerage account.

You don’t need to invest in the IPO or before the IPO to earn profit. Remember that Tesla shares priced at $17 in their IPO and closed the first trading day at $23. At this writing, they cost almost $200. That may not happen again, but even a post-IPO purchase can be very profitable if the company does well!

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Are There Any Concerns About Discord?

Any pre-IPO investment comes with risks. If the IPO comes off in a receptive market, you can earn significant gains. If Discord delays or cancels the IPO, you may not be able to sell your shares.

As with all investments, there are also some potential concerns about Discord.

• Discord Isn’t profitable. This is common with development-stage tech companies, but you’ll want to keep a close eye on the operating losses.
• Discord has limited revenue sources. Right now, almost all revenue comes from Discord’s premium service. Many users use the free service. There’s potential for advertising and a valuable user database, but using these some could antagonize users accustomed to the current experience.
• There’s competition. Discord occupies a competitive niche, facing apps like Facebook, Slack, Skype, Clubhouse, Twitter, TeamSpeak, and many others.
• Potential political interference. White supremacist and neo-Nazi groups have used Discord to plan activities. The Company is trying to control its users, but the potential for abuse still exists and could encourage more aggressive regulation.

As with any investment, you’ll have to do careful research to determine whether investing in Discord stock is the best use of your money. Consider discussing your plans with a qualified financial advisor!

Conclusion

Discord is a widely recognized company with backing from high-profile venture capital firms. It has turned down acquisition attempts from major players and is expected to hold an IPO soon. 

Discord is privately held, and you cannot buy Discord stock on the open market. You may be able to invest in Discord shares in pre-IPO marketplaces. There may be high minimum purchase requirements and investor qualifications.

Pre-IPO stock purchases can be very profitable but carry a number of real risks. 

FAQs

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How Can I Buy Hulu Stock?

Hulu is a majority-owned business entity, so it isn’t possible to buy its stock. Instead, you can invest in its parent companies: Disney (DIS) and Comcast (CMCSA).

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Will There Be a Hulu IPO?

An IPO was planned in the past, but it didn’t go forward. It is also unlikely to happen in the future.

How to Buy Hulu Stock?

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On the 16th of August 2010, a report revealed that Hulu was planning an initial public offering. On the 21st of June 2011, The Wall Street Journal reported that an “unsolicited offer” caused Hulu to begin “weighing whether to sell itself.” Still, in October 2011, Hulu’s owners announced that they didn’t accept any proposed offers.

Disney could spin off Hulu to shareholders in a Hulu IPO if they wanted, but that is unlikely to happen given that Hulu aligns well with Disney’s content strategy. As Disney moves more into digital content in its streaming platforms such as Hulu and Disney+, it’s unlikely they would want to lose that revenue anytime soon.

What Is Hulu Stock Price?

Hulu isn’t a publicly traded company, so there is no stock price for Hulu.

Hulu is currently privately owned by Disney (DIS), owning 67%, and Comcast (CMCSA), owning the remaining 33%.

What Is Hulu’s Stock Symbol?

Since Hulu isn’t a publicly traded company, there is no Hulu stock symbol.

Because Hulu is owned by Disney (DIS) and Comcast (CMCSA), you can look those tickers up on your broker’s website if you want to check out how those two companies are performing.

Update: In Sept. 2022 CNBC reported that Disney is expected to acquire the remaining 33% of Hulu from Comcast, making Hulu a wholly-owned subsidiary of Disney. It is possible that Disney could spin Hulu off in an IPO but there is no indication that Disney is considering such a move. A Hulu IPO remains unlikely.

Disney’s acquisition of Hulu will combine Disney+ and Hulu under the same ownership and make Disney America’s leading provider of streaming services.

Conclusion

Even though it’s impossible to buy Hulu stock directly in the stock market, investors can instead purchase stocks from its parent companies Disney (DIS) and Comcast (CMCSA). That way, you can partially own Hulu alongside the rest of the businesses owned by these companies.

Remember that even though both Disney and Comcast sound like safe bets it’s always a good idea to get educated and do research before buying any individual stock on your own.

FAQs

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Let’s look at TikTok’s stock and how you can invest in it.

Update: in Sept 2022, ByteDance CFO Julie Gao reiterated that the company has no plans to go public, making an IPO highly unlikely.

Update: in April 2023 the Financial Times cited an unnamed US tech investor as stating that a ByteDance IPO is not likely to happen soon: “TikTok has to be sorted out first… and everyone wants to see the Ant Financial problem resolved before any ByteDance IPO.”

What Is TikTok?

TikTok is a video-sharing social networking service. Its users use it to create short videos, between 15 seconds and 10 minutes.

This mobile app belongs to a company called ByteDance. ByteDance is a privately held Beijing-based company founded in 2012. ByteDance is currently valued at around $220 billion, a 25% drop over the last year.

TikTok is the international version of Douyin, which was launched in 2016 in the Chinese market. In 2017 it was branded TikTok and launched internationally outside China. Even though the apps are similar, they run on separate servers to comply with Chinese censorship restrictions.

An interesting feature of TikTok is that it uses artificial intelligence to analyze users’ interests and preferences and display personalized content to them.

Why Does TikTok Get So Much Attention?

Source: Business of Apps

In 2021, TikTok was the most downloaded app of the year beating Facebook, Instagram, WhatsApp, and Messenger. TikTok is currently the 6th most popular social media app in the world and the second most popular video-specific app, behind only YouTube.

TikTok has also seen its share of controversies. The app was briefly banned in Pakistan and India. The Trump administration proposed a US ban for security reasons, though some observers believed that it was a consequence of pranks by TikTok users aimed at Trump, notably a mass purchasing of rally tickets by non-attendees in 2020.

The combination of popularity and controversy draws attention, and TikTok has become a highly recognizable brand for consumers and investors alike.

Is There a Stock Associated With TikTok?

TikTok is a product created by a Chinese company called ByteDance. ByteDance is still privately held, meaning its shares are not available on the stock market yet.

That said, ByteDance has received investment from SoftBank, a well-known investment firm. Softbank is keen to have a successful IPO amongst its investments, after Uber, Slack, and WeWork’s failures, and ByteDance will likely be their next bet. That means it’s reasonable to believe that ByteDance will go public at some point soon and therefore enable users to invest in TikTok.

How Can I Invest in TikTok?

ByteDance is a privately held company and its shares do not currently trade on any public exchange. Since it’s not possible to buy TikTok stock from the stock market, there might be other possibilities for investors to invest in ByteDance pre-IPO.

How to Buy TikTok Stock?

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Some platforms provide a secondary market for pre-IPO equity. The way it works is that shareholders of private companies can sell their stock options to investors. Most shareholders will probably be employees of these companies that want to get some liquidity for their illiquid company stock.

These marketplaces often impose investor qualifications, and there is no guarantee or assurance that they will have available shares in any given pre-IPO company.

• Forge Global merged with Sharespost in 2020. The combined company is now the world’s largest marketplace for private company shares. Investors must make a minimum purchase of $100,000 worth of shares. The minimum may be higher for some companies. Investors may need to meet qualification requirements.
• EquityZen acquires shares from early investors or from employees who have received stock as part of their compensation. They work with companies to assure that transactions will be recognized and sell the shares to investors who meet the revised SEC “accredited investor” criteria. There’s a minimum investment of $10,000, which may be higher for some companies.
• Nasdaq Private Market provides access to private-company shares for investors who meet the SEC’s accredited investor criteria.
• EquityBee is a private marketplace that allows investors to fund employee stock options in return for a share in the proceeds of an eventual sale.

Another possibility is investing in a private equity fund that invests in companies like ByteDance in venture capital rounds. Both EquityZen and AngelList provide such funds where investors can diversify their investments in early-stage or pre-IPO stage companies. By investing in these funds, investors get exposure to great early-stage companies pre-screened by professional investors.

These private equity funds usually require an investor to be a high-net-worth individual. That means only wealthy individuals can really invest in such funds.

  See ALL the ways you can get in on pre-IPO investing: How to Buy Pre-IPO Stocks?

Invest in the IPO

If pre-IPO shares are not available or if the minimum purchase or qualification requirements are prohibitive, you can consider investing in the IPO itself.

Most IPO underwriters allocate set numbers of shares to specific brokers for their clients. You’ll need an account with a broker that has a share allocation. You will tell your broker how many shares you want and they will tell you how many you can get. There is no assurance that you will be able to get a share allocation.

Many brokers have requirements for IPO participation, which you will have to meet.

• Charles Schwab requires a history of at least 36 trades and an account balance of $100,000 or above for IPO participation.
• E*Trade has no minimum account balance or trading history requirements for IPO participation. An eligibility questionnaire may be required by the underwriters of the IPO.
• Fidelity allows IPO participation for clients who meet a minimum household asset requirement or are in their Private and Premium client groups.
• TD Ameritrade offers participation in IPOs if they are part of the selling group. You will need a minimum account balance of $250,000 or 30 trades in the last calendar year to qualify for an IPO share allocation.

IPO shares may come with a lockup period, often 60 or 90 days. You will not be able to sell your shares until the lockup period expires.

IPO shares will cost more than pre-IPO shares. That cuts your potential gains, but you’ll also have less risk. If you buy at an IPO you know there will be a market for your shares when the lockup period expires, even if there’s no assurance of profit.

There is no assurance that a ByteDance IPO would happen on a US market. If you want to buy at a foreign IPO you will need to look into investing in foreign markets.

Invest After the IPO

The easiest and safest way to buy stock in ByteDance is to wait until after the IPO. You can use your usual broker and there won’t be any special requirements or lockup period. You’ll be able to sell whenever you want.

If you buy after the IPO you won’t get in as cheaply as you would with an IPO or pre-IPO purchase. On the other hand, you’ll be able to buy as few or as many shares as you want, and you’ll have a chance to observe the stock’s market reception before you pull the trigger. That’s especially important if the company makes its debut during a generally weak market.

Getting in before the IPO is not a guarantee of quick profit. Not all stocks spike in value after an IPO. Some, even shares in quality companies, may sputter or even drop immediately after the IPO.

If you buy after the IPO you won’t get the rock-bottom prices that you would get from a pre-IPO purchase or the somewhat higher price you’d pay for participating in the IPO. On the other hand, you will be able to gauge the market’s reception to the IPO before you buy. Not all IPOs soar out of the blocks. Some of them crash.

For long-term investors, the price difference between a pre-IPO and a post-IPO purchase may not be large enough to justify the greater complexity and risk of buying early. If you’re in that bracket, a post-IPO purchase is probably the best way to go.

Since it’s unlikely that there will be another funding round in the short-term, waiting for ByteDance to become public seems to be the simplest route to invest in TikTok.

Also, it’s worth keeping in mind that choosing stock on your own is not always a great idea, especially pre-IPO.

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Are There Any Issues With TikTok?

All investments involve risk, and pre-IPO investing is particularly risky. If you are considering an investment in TikTok, consider these and other risk factors.

• There may not be an IPO or an exit point. There is no way of knowing when or if ByteDance will have an IPO. If the company does not go public it could be difficult or impossible to sell shares.
• TikTok is controversial. TikTok has been temporarily banned in several major markets. Further bans could hava an impact on the company’s results.
• China/US friction. TikTok and ByteDance could be caught up in trade or political disputes between the US and China that could affect the company.
• Social media is a fast-changing, trend-driven business. Right now TikTok is the rising star but next year there could be a new one.
• Internal Chinese issues. Several Chinese tech companies have seen crackdowns from Chinese authorities. ByteDance could be next.

As with any investment, careful balancing or risks and potential rewards is essential.

Conclusion

ByteDance is the world’s most valuable VC-backed company by a wide margin. That alone is guaranteed to whet the appetities of investors. There’s still no indication that the company will go public any time soon, or at all. Under these circumstances investment would have to be considered highly speculative if it is possible at all.

FAQs

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Can you buy Stripe stock ahead of the IPO? It may be difficult, and there are real risks to any pre-IPO investment, but it may be possible.

Let’s take a closer look at Stripe, at the reasons you might want to buy pre-IPO shares, and at some of the ways that you may be able to buy stock in Stripe.

What Is Stripe?

Stripe: Fast Facts
Industry	Financial services, Payment processor
Key Competitors	Adyen, Square, PayPal
HQ	San Francisco, California, United States
Founded	2010
Key People	Patrick Collison (Co-founder, CEO), John Collison (Co-founder, President)
Employees	8,000
Website	www.stripe.com
Current Valuation	$74 billion
IPO Status	Private

Stripe is a technology company that builds economic infrastructure for the internet. Stripe’s payment processing solutions are used by companies like Amazon, Google, Shopify, Instacart, Zoom, Lyft, and many others.

Aside from payment processing, Stripe offers e-commerce APIs (application programming interfaces) that allow multiple systems and databases to communicate seamlessly. Other products include an in-store point-of-sale solution, subscription-based payments, invoicing, card issuing and lending services, and risk and fraud management.

Stripe offers a large number of third-party integrations that allow the platform to work with analytics, shipping, CRM, and accounting software. Stripe features a high degree of interaction with regulators, financial institutions, and payment networks, removing compliance and service burdens from clients.

This suite of financial services produced more than $12 billion in revenue in 2020, up 48.5% from $7.4 billion in 2020. We won’t know whether Stripe is profitable or not until the Company files financial statements, but the business is well established, has substantial sales, and appears to be growing fast.

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Financing and Growth

Stripe has held ten equity funding rounds since 2010, raising $2.2 billion from 39 different investors.

In the latest round, in March 2021, Stripe received $600 million, pushing its valuation to $95 billion, nearly triple the previous valuation of $36 billion in April 2020.

This valuation made Stripe the second-highest valued venture capital-backed US company: Elon Musk’s SpaceX recently moved past Stripe with its latest funding round. This makes Stripe the fifth highest valued VC-backed company in the world.

As of July 2022 Stripe slashed its internal estimate of its own valuation by 28%. It remains to be seen whether this revised valuation will be reflected by the market in a subsequent funding round.

When Will Stripe Hold Its IPO?

There’s no schedule for the IPO yet, and no initial registration documents have been filed. Most observers still believe that the Company is preparing for an IPO, and the 2020 hiring of CFO Dhivya Suryadevara, formerly Executive Vice President and CFO of General Motors, was widely seen as a step toward going public.

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An IPO is widely expected in early 2022 and promises to be a major entry in the year’s IPO calendar. That could still change if market conditions take a dramatic downturn.

How Can I Buy Stripe Stock?

Stripe is still privately held, meaning its shares are not available on the public stock market yet.

The latest private funding Stripe received in March 2021 pushed its valuation to $95 billion, nearly triple the previous valuation of $36 billion from April 2020. This valuation made Stripe the highest valued venture capital-backed US company at that time. Today Stripe is the fifth highest valued VC-backed company in the world, behind ByteDance, Ant Group, Shein (all based in China) and Elon Musk’s SpaceX.

There are other possible ways to invest in Stripe pre-IPO. Let’s look at some options.

How to Buy Stripe Stock

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Invest Through a Pre-IPO Secondary Market

There are ways to buy shares in privately held companies before the IPO. The process may not be simple, and there’s no guarantee that you will be able to acquire shares.

Here are three pre-IPO markets that may have Stripe shares available for purchase before the IPO.

• EquityZen acquires pre-IPO shares from early investors, employees who want to liquidate stock options, and other insiders and makes them available to qualified investors. There’s a $10,000 minimum investment, which may be higher for some shares.
• Forge Global is the biggest pre-IPO marketplace in the world. The minimum investment is $100,000. There may be higher minimums for some shares and buyers may have to meet qualification criteria.
• SecFi links employees that want to liquidate their stock-based compensation with outside pre-IPO investors.
• ‎Nasdaq Private Market provides access to private company shares for investors who meet SEC accredited investor criteria.
• EquityBee is a marketplace that allows investors to fund an employee’s stock options in return for a share of the proceeds.

Stripe shares may not be available on any of these marketplaces at any given time. You’ll need to visit the websites and set up an account and log in to get information on currently available shares.

  See ALL the ways you can get in on pre-IPO investing: How to Buy Pre-IPO Stocks?

Invest in the IPO

Pre-IPO investing is not easy, and shares may not be available. Another option is to invest in the IPO. You won’t get the same price that you’d get in the pre-IPO market, but your risks will be lower. At least you’ll know that the Company will go public and you will be able to dispose of your shares.

Retail investors can participate in IPOs through several major brokers. You will have to meet requirements and you may need to supply information on your finances to meet qualification requirements.

• TD Ameritrade allows account holders to participate in IPOs where it is part of the selling group. You will need a minimum account balance of $250,000 unless you have made at least 30 trades in the last calendar year.
• Fidelity customers who are in the Private or Premium groups may participate in IPOs. Others may be able to join if they meet a minimum household asset requirement.
• Charles Schwab allows IPO participation for account holders with an account balance of $100,000 or at least 36 trades in their account history.
• E*Trade has no account balance or trading history restrictions on IPO participation. The underwriter of the IPO will supply a qualification questionnaire.

Companies holding IPOs are making an effort o make more shares available to retail investors. The recent Rivian IPO saw the Company offer shares to retail investors through SoFi. Follow the news on the upcoming IPO for announcements of IPO share allocations for private investors and the brokers that will handle them.

In any case, you will have to request IPO shares from your broker after qualification. There is no assurance that the full amount of your request – or any shares at all – will be allocated to you by your broker.

Invest After the IPO

The easiest way to buy Stripe stock is to wait until after the IPO and buy it through your regular broker. You won’t get in at the lowest possible price, but that doesn’t mean you won’t make a profit.

Many investors compare the pre-IPO prices paid by venture capital investors to the IPO price and dream of matching those gains. That’s not always easy, and it may not be possible. It’s also important to recognize that many pre-IPO and IPO shares are subject to lockup periods and can’t be sold immediately.

If you are really convinced that a company has a bright long-term future, investing immediately after the IPO is a perfectly reasonable move, especially if you don’t meet the qualifications for pre-IPO or IPO investing. If you bought Telsa, Google, or Facebook on IPO day you might not have the same gains as the earliest investors, but you’d still have made a great deal of money!

Once Stripe concludes its IPO you can buy shares through any conventional broker.

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Are There Any Concerns About Stripe?

There are several online payment platforms, so Stripe is working in a competitive environment.

Although the company is growing worldwide, Stripe is only available in few countries compared to, for example, PayPal. That said, PayPal has been around for a lot longer, so there’s plenty of room for Stripe to grow and expand into more markets.

Finally, Stripe needs to catch up with its competitors and continue bringing unique value, or otherwise, it will risk becoming obsolete.

There are inherent risks in all pre-IPO investing if market conditions change the Company could postpone or cancel the IPO. If that happens it could be difficult to liquidate shares. Always consider the risks before making any investment, especially in a private company.

Read our guide on pre-IPO investing for more information on how pre-IPO stocks work and the potential risks and rewards that they present.

Conclusion

Stripe is a leading payments processing company with a strong growth record. The company has attracted major venture capital investments. It is the largest venture-backed private company in the US and one of the largest in the world.

Stripe is expected to go public in early 2022. The IPO will be heavily watched and shares will be highly sought after.

Pre-IPO investing is always risky, but if the IPO takes off early investors could see large gains. Shares may be available on several pre-IPO secondary markets.

If pre-IPO shares are not available, investing in the IPO or immediately after it are also viable ways to get an early piece of Stripe’s future.

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The post How to Buy Stripe Stock in 2024: The Facts You Need appeared first on FinMasters.

Impossible Foods is the brainchild of CEO/Founder Dr. Patrick O. Brown, Professor Emeritus of Biochemistry at Stanford University’s School of Medicine. The company set out to analyze and isolate the factors that give meat its appeal and replicate them in a plant-based alternative.

Impossible Foods introduced its burger substitute in 2016 and upgraded its formulation in 2019. They introduced Impossible Sausage in 2020.

In April 2021, in the midst of the hottest year ever for IPOs, Reuters reported that Impossible Foods was preparing to go public, either via an IPO or through a SPAC merger, and would seek a valuation approaching $10 billion.

In 2022, with the IPO market in a deep slump, rumors had the company preparing for an IPO with a $7 billion valuation. In February 2023, the CEO stated that the IPO would happen but probably not this year. In the meantime, the plant-based meat market has seen some major disruption, with direct competitor Beyond Meat suffering a 90% decline in its stock price since mid-2021.

Where is that market going? Will Impossible Foods hold an IPO this year? What are the opportunities and risks? Can you invest before the IPO?

Let’s take a closer look.

What is Impossible Foods?

Impossible Foods states that the Company’s mission is to “make the global food system truly sustainable by eliminating the need to make food from animals”. They intend to accomplish this by recreating the entire sensory experience of meat, dairy, and fish in entirely plant-based products.

Impossible Foods identified a single molecule called heme, a precursor to hemoglobin, as the distinguishing factor that gives meat its flavor. They produce this molecule using genetically engineered yeast and incorporate it into their products.

The Impossible Foods burger made its debut in 2016 and was reformulated in 2019. Impossible sausage in savory and spicy variants followed in 2021, and the Company recently introduced substitutes for chicken nuggets, meatballs, and pork.

Impossible Foods products are currently available in about 25,000 grocery stores and 40,000 restaurants – including Starbucks and Burger King – in the United States, Australia, Canada, Hong Kong, Macau, New Zealand, Singapore, the United Arab Emirates, and the United Kingdom. The Company claims to be the fastest-growing plant-based meat substitute producer in the world.

Impossible Foods describes its products as a sustainable, environmentally sensitive alternative to meat. They point out that an Impossible burger uses 96% less land and 87% less water than an equivalent amount of beef while generating 89% fewer greenhouse gases and 92% less water contamination.

Where is the Market Going?

Plant-based meat substitutes were once seen as the next big thing. Venture capitalists and investors flocked to the niche, and the sky seemed like the limit. Beyond Meat, the largest publicly traded meat substitute specialist, priced its May 2019 IPO at $25. The stock was trading at $45 by the afternoon and quickly soared to over $234.

Then reality set in. Revenues stagnated and then dropped. Losses soared, and the stock tumbled.

Was that an indication that the plant-based meat substitute market is not going to be what it was once expected to be, or is it a problem specific to Beyond Meat?

Predictions for the market remain rosy.

At the same time, companies appear to be backing away from the Niche. Food giant Nestle recently scaled back its move into meat substitutes. Other players in the niche, including Oatly, Quorn, and The Tattooed Chef, have hit serious rough patches.

Analysts cite the relatively high prices of meat substitutes – significantly higher than meat – and the perception that the products are a “fad” as limiting factors.

To illustrate the price issue, Amazon sells Impossible Foods plant-based meat in bulk at $16.75 a pound. Regular ground beef sells at $5.79/lb, with grass-fed Angus ground beef at $11/lb.

It’s not clear whether Impossible Foods has been affected by this general slump in the plant-based meat substitutes market. Without a formal IPO filing, we don’t have access to audited financials. It is still a trend that potential pre-IPO investors will want to watch carefully.

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When Will Impossible Foods Hold Its IPO?

On April 8, 2021, Reuters reported that Impossible Foods was preparing for a public listing “in the next 12 months”, through an IPO or SPAC, that would see the Company valued at $10 billion or more.

As of today, no formal plans have been announced, and no S-1 has been filed. The Company may have elected to delay the listing due to overall uncertainty in the markets.

In March 2023, Impossible Foods CEO Peter McGuinness stated that a 2023 IPO was unlikely:

“I wouldn’t expect it, probably not. I mean, anything’s on the table, but we’re well capitalized at the moment and it’s not a great macro environment to do so. It’ll happen, probably not this year.”

At this point, there is no clear indication of when the Impossible Foods listing will take place. Most observers suggest that the Company prefers an IPO listing to a SPAC merger, to avoid diluting current shareholdings. The public listing move is expected when the Company believes market conditions are receptive.

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What Do We Know About Impossible Foods’ Fundamentals?

As a privately held company, Impossible Foods does not report financial figures, and until they file a prospectus, we won’t have a clear picture of the Company’s financials.

We can pick up some bits and pieces from public reports, though their accuracy is hard to verify.

• Reuters reported in April 2021 that the number of stores carrying Impossible Foods products increased from 150 to 20,000 in the past year.
• Forbes reported in Feb. 2022 that Impossible Foods’ 2021 revenues were up 85% over 2020.
• Impossible Foods claims to be the fastest-growing retail plant-based meat company.
• Impossible Foods cut its product prices by 20% in 2021, a move that could gain market share but could also affect profitability.
• Zippia estimates that 2022 revenues were $4.5 million without citing sources or methods.

Assuming that the increase from 150 stores to 20,000 in 2021 is accurate, the other claims make sense. It is far from certain that this implied growth rate is sustainable.

Impossible Foods may reveal more information about its finances and growth trajectory, or it may decide to wait until they file a formal prospectus. At this point, the publicly available information on the fundamentals of Impossible Foods is too limited to draw any meaningful conclusions.

Impossible Foods Financing

Impossible Foods has held 12 rounds of private capital, raising $1.9 billion. The most recent financing round was on Nov. 23, 2021. The Company raised $500 million in a financing round that left the Company valued at roughly $7 billion.

Impossible Foods has attracted 57 venture capital investors, including 8 lead investors. Lead investors include Mirae Asset Global Investments, Global Secure Invest, Empede Capital, Temasek Holdings, and Serena Williams.

Factor to Watch: Beyond Meat

Impossible Foods’ rival Beyond Meat held its IPO on May 2, 2019, pricing at $25 per share. In April 2021, when Impossible Foods was first reported to be seeking an IPO, Beyond Meat was trading at 400% above that IPO price.

In October 2020 Beyond Meat peaked at almost $195 per share. That peak was followed by a rapid decline, and shares are now trading at $17.67, leaving the Company valued at $1.09 billion. The drop was driven by weak sales growth and growing losses.

Some analysts think it unlikely that Impossible Foods can sustain a higher valuation than Beyond Meat, and the weak performance of Beyond Meat in the second half of 2022 may cause Impossible Foods to delay its listing until the market shows a more positive view of view plant-based meat substitutes.

How Can I Buy Impossible Foods Stock

Impossible Foods is currently a privately held company and its stock does not trade on any public exchange. Purchase through a conventional broker will not be possible until the Company holds a public listing.

How to Buy Impossible Foods Stock

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There are still options for those who wish to purchase Impossible Foods shares. You may be able to buy through pre-IPO marketplaces. These marketplaces buy shares from early investors or from employees who have received stock options as part of their compensation. They then resell the shares to pre-IPO investors.

Pre-IPO Secondary Markets

These marketplaces often impose investor qualifications, and there is no guarantee or assurance that they will have available shares in any given pre-IPO company.

• Forge Global merged with Sharespost in 2020. The combined company is now the world’s largest marketplace for private company shares. Investors must make a minimum purchase of $100,000 worth of shares. The minimum may be higher for some companies. Investors may need to meet qualification requirements.
• EquityZen acquires shares from early investors or from employees who have received stock as part of their compensation. They work with companies to ensure that transactions will be recognized and sell the shares to investors who meet the revised SEC “accredited investor” criteria. There’s a minimum investment of $10,000, which may be higher for some companies.
• Nasdaq Private Market provides access to private-company shares for investors who meet the SEC’s accredited investor criteria.
• EquityBee is a private marketplace that allows investors to fund an employee’s stock options in exchange for a share of the proceeds if the stock is liquidated.

There are substantial risks in pre-IPO investing. An IPO may not take place as expected, and if it doesn’t there may be no market for your shares. Learn more about pre-IPO investing.

Review this guide to how to buy pre-IPO stock before you consider a pre-IPO purchase of Impossible Foods stock!

Invest in the IPO

If pre-IPO shares are not available or the requirements are too strict, investing in the IPO may be a better option. Many IPOs allocate limited numbers of shares to major brokers, and if your broker has a share allotment, you may be able to buy at the IPO. You may still need to meet the qualifying requirements.

You’ll have to tell your broker how many shares you’d like to buy, and there’s no guarantee that you’ll get that number or any allocation at all.

Several major brokers provide IPO investing access for clients. Different brokers have different requirements.

• Charles Schwab requires a history of 36 trades or an account balance of at least $100,000 for IPO participation.
• E*Trade has no account balance or trading history requirements for IPO participation. You may have to pass a questionnaire provided by the IPO underwriters.
• Fidelity allows IPO participation for clients who meet a minimum household asset requirement or are members of their Private and Premium client groups.
• TD Ameritrade allows IPO participation if they are part of the selling group. Participants must have a minimum account balance of $250,000 or have made 30 trades in the last calendar year.

Buying at the IPO has one major advantage over a pre-IPO purchase. At least you know that after the IPO, there will be a public market for your shares. You may not be able to take immediate advantage of that market, though. IPO share purchases typically come with a 30 or 60-day lockup period.

Invest After the IPO

If you’re convinced that Impossible Foods will be a good long-term investment, the simplest way to buy the stock is simply to wait until the IPO concludes. You can then buy through your regular broker with no restrictions or requirements. You’ll be able to sell the stock at any time you like.

You will not get the low per-share price that you’d get from a pre-IPO or even IPO investment, but you’ll face substantially less risk. You’ll also get a chance to see how the market responds to the IPO before you pull the trigger.

If the stock rises straight after the IPO your entry price will be substantially inflated, but that is by no means guaranteed. If you intend to hold the stock for an extended period the difference is likely to be minimal.

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Are There Any Concerns About Impossible Foods?

Early-stage companies are often risky investments, and the risks may be difficult to assess until the Company reveals its full financials in a detailed prospectus. Here are some things to consider before buying Impossible Foods stock.

• Impossible Foods faces significant competition. Beyond Meat is the most visible competitor, but major food industry names like Hormel, Perdue, Tyson, and Smithfield are also introducing plant-based meat substitutes. There’s no way to anticipate which products consumers will prefer.
• International expansion may face regulatory issues. Impossible Foods uses genetically modified yeast to produce the molecule it relies on for its meat-like flavor. This has raised regulatory questions in markets where GMOs remain targets of suspicion, notably Europe and China. Some consumers in other markets may shy away from the GMO connection, even where regulators are more favorably disposed.
• Uncertain market reception. Competitor Beyond Meat catapulted to dramatic gains after its IPO, only to drop solidly back to earth. Weak performance from Beyond Meat and other companies in the niche raises questions about the market’s perception of the plant-based meat substitute industry.
• Limited information. Impossible Foods is not required to disclose financials until they file a prospectus for a public listing. If you choose a pre-IPO purchase you’ll have a limited amount of information to assess the company’s current financial situation.

These risks are speculative. They may or may not emerge as significant issues. There may also be risks that are currently not known or anticipated.

Conclusion

Impossible Foods has generated considerable attention, and the IPO is widely anticipated. A number of celebrity supporters are visibly on board, and the Company enjoys a high public profile.

A high profile does not guarantee success, of course, and at this point, everything about the IPO remains speculative. The funding round last November should provide sufficient working capital for some time, so the Company should not need to rush into a public listing.

Impossible Foods clearly intends to go public, but the listing is likely to be postponed until market conditions are more stable and receptive.

You may be able to purchase pre-IPO shares through a private equity marketplace. You may be able to participate in the IPO if your broker has a share allocation.

It may be possible to purchase pre-IPO shares through private equity marketplaces or to participate in the IPO through selected brokers. In either case, you will need to go through a qualification process. You can also buy shares after the IPO.

You will need to carefully assess the company before making any investment. Consider discussing your plans with a professional investment advisor!

FAQs

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Let’s take a closer look.

How to Confuse an Investor

Few companies that exist today or have existed in the past have held such a strong competitive advantage in their respective field as The Coca-Cola Company. Created in 1886 by a pharmacist, Coca-Cola has, over the past 134 years, buried itself into the mind of billions of consumers around the world as being the perfect beverage to bring an element of happiness into their lives.

Such a strong competitive advantage would naturally attract any serious investor, but when looking for more information about the company, it’ll be easy to become confused due to the unique peculiarity of The Coca-Cola Company’s business model.

Just look at IBIS World’s most recent report on the Soda Production industry, and you will see that there is almost no mention of The Coca-Cola Company, but still entire sections given to Pepsi and Keurig Dr. Pepper. The reason for this is that The Coca-Cola Company doesn’t actually produce very much soda.

The actual production of Coca-Cola’s beloved brands is done by independent partners and distributors, commonly known as “bottlers”. To make things more confusing for anyone hoping to invest in Coca-Cola is that the bottlers have nearly the exact same name.

While you won’t see The Coca-Cola Company listed in the Soda Production report next to Pepsi and Dr. Pepper, what you will see listed is Coca-Cola Bottling Co. Consolidated, the largest independent bottler of Coca-Cola within the United States. The similar names are deceiving, but the two are completely different companies, each listed separately on the New York Stock Exchange.

For clarification, here are the companies with the appropriate stock tickers:

• Coca-Cola Company (KO): Parent Company
• Coca-Cola Consolidated (COKE): Bottling Company

The Bottling Business

So, why does Coca-Cola have such a strange business model? Is it just to confuse us, investors?

Dating all the way back to the early 1900s, the makers of Coca-Cola realized they could improve not only their productivity and efficiency but also their profitability by having other companies do the manufacturing and distribution of their products. All Coke had to do was simply supply the raw material and allow the companies to use the Coca-Cola brand name, showing the immense power of brand recognition.

This business model grew more ingrained into the foundation of The Coca-Cola Company as their brand grew stronger worldwide. Demand for the red can, white lettering, and dark fizzing liquid inside grew year after year in almost every country on Earth. By 2020, the Coca-Cola network had 225 bottling partners in more than 200 countries; which is no surprise given that almost 85% of Coca-Cola’s sales come from outside the U.S.

The arrangement between The Coca-Cola Company and its bottlers is set out in contracts. Each one states which Coca-Cola products the bottler is able to sell, in what region they are allowed to sell, as well as dozens of other variables laid out to make the distribution of Coca-Cola products as streamlined as possible.

Coca-Cola Bottling Co. Consolidated, for example, is authorized to sell 38 Coca-Cola products in 14 states and the District of Columbia. Coca-Cola Bottling also sells almost a dozen beverages outside of the Coca-Cola lineup including Dr. Pepper, Dunkin’ Donuts Coffee, and Monster Energy drinks.

Still, over 85% of the bottling company’s total sales were from Coca-Cola beverages, but even as the largest independent bottler in the United States, Coca-Cola Bottling still only brings in 12% of the revenue that The Coca-Cola Company brings in.

While The Coca-Cola Company offers funds for marketing efforts and other expenses, it largely leaves the bottlers to their own management. Each one gains its own retail customers within its given region and markets extensively to try and gain brand recognition. Incidentally, the vast majority of semi trucks and delivery vans plastered with the Coca-Cola logo are not actually owned by The Coca-Cola Company but are instead owned by local bottlers.

The sales of almost all bottling companies in the U.S. are highly concentrated in just a few large retailers. In 2019, Walmart represented 19% of Coca-Cola Bottling Co. Consolidated’s sales, with Kroger representing 12%.

The Worse End of the Deal

The bottlers undoubtedly have the worse end of the deal, as they have to purchase and maintain the manufacturing and distribution equipment while also having to pay The Coca-Cola Company a vast portion of its income.

In 2019, Coca-Cola Bottling Co. Consolidated brought in $4.8 billion in revenue, with $1.3 billion of that going to The Coca-Cola Company for concentrate and syrup, consumer marketing programs, as well as drink equipment. While this arrangement is not inherently bad, it just makes profitability a more laborious task for the bottling company.

See the difference between the two’s profitability for yourself:

COKE’s Profitability

Source: Stock Rover

KO’s Profitability

Source: Stock Rover

As you can see, KO’s profitability is higher in almost every regard, but the margins especially stand out. KO maintains a very robust 24% net profit margin, while COKE only operates at around 2%. Additionally, KO’s ROE is more than double COKE’s ROE.

Nevertheless, the Coca-Cola bottlers continue this arrangement with The Coca-Cola Company, given that they have virtually no other option. Given how strong consumer brands are within the beverage and food markets, the bottlers would have no success in trying to develop their own soft drink line, even if they did have all the ingredients, manufacturing equipment, and distribution channels.

Although the bottlers may not have the most lucrative business, the Coca-Cola network shows the genius of the Coca-Cola management, which realized early on that the value of their product was not in the production, distribution, or even the taste. The business recognized its own economic moat: the value of a worldwide brand.

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$3000 a month may be more or less than you need, but it’s a benchmark that can give you a sense of what we’d need to invest to generate any other amount.

How Much Money Do I Need to Invest to Make $3000 a Month?

The answer will depend on the yield of your chosen investments. The yield is the percentage of your capital that the investment returns to you each year. If you invest $100,000 at a 5% yield, you’ll earn $5000 a year (before taxes) or $416.67 a month.

Here’s a look at what you’d need to invest to earn $3000 a month, or $36,000 a year, at different yields, courtesy of Vanguard’s investment income calculator.

As you can see, the amount you need to invest to earn $3000 a month varies widely with the percentage yield of your investments. The higher the yield, the lower the amount you need to invest to make $3000 a month.

Important note: all investments involve risk. With income investments, yield is inversely proportional to risk: safer investments carry lower yields and riskier investments carry higher yields. Income investors must balance the desire for high yields with a careful assessment of risk.

Where Should You Invest to Make $3000 a Month?

Income investors have multiple investment options, each with advantages and disadvantages. These are some of the most common.

Bonds

When you buy a bond, you are lending money to the bond issuer. The bond issuer will pay you a fixed interest rate and return your principal when the bond matures. You can also sell the bond to another investor.

There are several types of bonds. As with all income investments, the riskier bonds carry higher interest rates. They also carry the possibility that the bond issuer may default, in which case you lose your investment.

Bond yields don’t just vary according to risk. They may change considerably with the prevailing interest rate at the time the bond is issued. There are two types of bond yields.

• Fixed-rate bonds pay the same interest rate for the life of the bond.
• Variable-rate bonds carry an interest rate that will change with the overall interest rate environment.

It’s important to know which you are buying. In a high interest rate environment, it is usually preferable to choose a fixed-rate bond.

US Government Bonds

US Government bonds are available in a huge range of maturities, ranging from a few months to 30 years. US bonds are regarded as one of the safest income investments, and the benchmark 10-year bond yield has been below 3% for most of the last 10 years.

Municipal and State Bonds

Local governments in the US also issue bonds, and they are also regarded as highly secure. These bonds typically carry interest rates slightly below those of US Government bonds.

Foreign Government Bonds

Foreign governments also issue bonds, many of which are for sale to any investor. Stable governments with good reputations will issue bonds with low interest rates. Bonds from less stable or less fiscally responsible countries carry higher rates and higher yields.

Corporate Bonds

Corporations also issue bonds. The interest rates on these bonds are determined by ratings issued by rating agencies, like Moody’s or Standard & Poors. These range from AAA-rated bonds issued by large, stable companies to high-interest “junk bonds” issued by high-risk companies.

Bond Interest Rates Compared

These sample bond interest rates are as of Dec 29, 2023. They will change over time, but these rates will give a sense of how rates of different bonds typically compare to each other.

These rates come from a generally high-rate environment and will fall as inflation stabilizes and the Fed cuts rates.

Dividend-Bearing Stocks

Dividend stocks are a favorite of income investors. They offer both regular income and the potential for appreciation, meaning that you can earn income and build a more valuable portfolio at the same time. They can also lose value if markets fall.

Companies that pay dividends are usually profitable, established firms with limited growth potential. They attract investors by returning some of their profit to shareholders through dividends.

Companies pay dividends as a fixed sum per share per year, usually in quarterly installments. The dividend yield is the annual dividend amount as a percentage of the amount you paid for the stock. The price of the shares may go up or down, but your dividend yield will always be your return as a percentage of your investment.

Many stocks carry dividends. They are common in sectors like energy, utilities, and Real Estate Investment Trusts (REITs), which are required by law to distribute 90% of their profits as dividends.

The average dividend yield of the S&P 500 is 1.62%. Many companies pay larger dividends. High-dividend stocks can be a valuable addition to an income portfolio, but a dividend that’s too high can indicate serious problems with the company that have pushed the share price down. Extreme cases include Petrobras, the national oil company of Brazil, which pays a dividend of 18.57% and carries a high risk of nationalization.

Here are some high-dividend stocks with solid track records and their dividend yields as of December 2023.

These yields may change at any time as the stock values change. If you’re looking for high-dividend stocks you’ll need to study dividend investing and make your own selections.

High-Interest Savings Products

Savings vehicles like high-interest savings accounts, CDs, and money market accounts are FDIC-insured and highly secure. Because risk is low, interest yields are also relatively low. Interest rates are also variable in most cases. They will fluctuate with the overall rate environment, which makes yields unpredictable.

Because the APYs change so often, these products will not be a good choice if you want to invest enough to make $3000 a month, unless you are confident that rates will remain stable or increase.

Rental Real Estate

Purchasing rental real estate can produce reliable returns on investment. It’s very different from bonds and dividend stocks, though: returns can vary widely with the property, and you will need to include financing costs, maintenance and management costs, potential vacancies, and taxes in your calculation to produce an accurate yield projection.

These costs can vary widely from property to property and from year to year with the same property. Forbes Advisor provides these estimates.

• Residential Real Estate yields average 10.6% annual yield. It would take a $339,623 investment for you to make $3000 a month.
• Commercial Real Estate yields an average of 9.5%. It would take a $378,947 investment for you to make $3000 a month.

These yields may vary widely based on location, management requirements, financing costs, and many other variables. Selecting and managing real rental real estate investments requires specific expertise and may not be the best choice for the inexperienced investor.

Peer to Peer Lending

Lending money and charging interest is one of the oldest ways of gaining income from an investment. Peer-to-peer lending platforms like Prosper and Upstart allow you to do just that, connecting lenders and borrowers and allowing investors to offer the same types of loans that banks and online lenders provide.

Peer-to-peer lending platforms like Upstart and Prosper connect investors with individual and business borrowers, with some platforms specializing in real estate loans. The platforms vet the borrower and charge a fee for their services.

Peer-to-peer lending yields will vary with the platform, the type of loan, and the creditworthiness of the borrower. According to Experian, Prosper claims a historical return rate of 5.7%, while LendingClub returns range from 4.7% to 10.3%.

There are risks, of course: like any lender, you run the risk that the borrower will default and fail to pay.

Start or Buy a Business

The most traditional way to turn an investment into income is to go into business. This may not be suitable for retirees – running a business is a lot of work – but for those with the interest and inclination, going into business can be extremely rewarding, both personally and financially.

There’s a near-infinite range of possibilities for going into business. You can start from the ground up or buy an existing business. You can go into online business or stick to bricks and mortar.

Whatever your choice, some things will be constant. You’ll face competition. You’ll need to work hard and bring a lot of passion, commitment, and time to the table. You won’t have any guarantees.

It is not possible to reliably estimate the ROI of any business venture, and returns, are not guaranteed at all. You won’t know how much you need to invest to make $3000 a month, and you won’t know how much growth potential your business will have until you try!

Building an Income Portfolio

If you want to invest enough to make $3000 a month – or any other figure – you will probably not want to put all of your investment capital into one vehicle. As with any investment portfolio, diversification is key.

That’s especially true for high-risk/high-yield income investments. You wouldn’t want to pour all your capital into bonds issued by one high-risk company, but spreading capital among the bonds of many high-risk companies can get you a high yield with somewhat reduced risk.

If you have a target yield – like $3000 a month – and a fixed amount to invest, you have two options.

• You can look for a mix of investments that will generate $3000 a month with the amount of capital you have.
• If you don’t have enough capital, or the risk profile needed to generate $3000 a month with your capital is unattractive, you will have to bring in more capital to reach your goal.

There is no specific fixed amount that you need to generate $3000 a month. The amount you need will depend on your risk tolerance and the yields you can reasonably expect to get from the investments available to you. Careful selection and blending of investments is key, and professional advice is one of the most effective ways to assure the optimum blend of risk and reward!

The post How Much Money Do I Need to Invest to Make $3,000 a Month? appeared first on FinMasters.

Berkshire Hathaway is now renowned as a global conglomerate boasting numerous companies, substantial equity holdings, and a CEO approaching his 90th year. While providing a comprehensive overview of all 60+ subsidiaries in a single article would be challenging, understanding the Berkshire Hathaway subsidiaries and significant equity investments can offer valuable insights into Buffett’s highly successful investing strategy.

Like many corporations, Berkshire organizes its diverse operations into distinct segments within its annual report, categorizing subsidiaries into various groups. These categories include:

• Insurance
• Railroads
• Utilities
• Manufacturing
• Consumer Products
• Service
• Retailing

Jump to the full list of companies owned by Berkshire Hathaway broken down by sector and the number of employees.

Insurance

Berkshire Hathaway’s insurance operations brought in total revenue of $75.65 billion, representing 25.04% of their total revenues, in 2022. Holdings include GEICO, Berkshire Hathaway Primary Group, and Berkshire Hathaway Reinsurance Group.

GEICO

GEICO, which stands for Government Employees Insurance Company, insures automobiles, motorcycles, all-terrain vehicles, and recreational vehicles, as well as homeowners, renters, and life and identity management. GEICO was purchased by Berkshire Hathaway in 1996 and is currently the second-largest auto insurer, after State Farm.

GEICO brought in 2022 revenues of $39.98 billion in 2022, or 13.23% of Berkshire Hathaway’s revenues.

Berkshire Hathaway Primary Group

The Berkshire Hathaway Primary Group consists of multiple different insurance operations which collectively offer commercial motor vehicle insurance, workers’ compensation, commercial property, healthcare liability, business owners’ insurance, as well as a number of other insurance offerings.

Berkshire Hathaway Primary Group revenues in 2022 were 13.75 billion, or 4.55% of total revenues.

Berkshire Hathaway Reinsurance Group

Berkshire Hathaway Reinsurance Group consists of a range of different reinsurance offerings to both insurance companies as well as other reinsurance groups. Their reinsurance offerings include coverages on property-casualty and life and health, most of which is written through Berkshire’s subsidiaries National Indemnity and General Re.

2022 revenues for Berkshire Hathaway Reinsurance Group were 21.92 billion, or 7.25% of total revenue.

Railroad

Burlington Northern Santa Fe

Ten years ago, Berkshire Hathaway acquired Burlington Northern Santa Fe for $34 billion. In 2020 the company had 40,750 employees, and in 2022 net earnings reached $8.6 billion. In 2022 the railroad brought in $25.9 billion in revenue, equaling 8.57% of Berkshire’s total revenue.

Utilities and Energy

Berkshire Hathaway Energy

In the late 1990s, Berkshire acquired 90.9% of Mid-American Energy, now called Berkshire Hathaway Energy, with Greg Abel and Walter Scott owning the rest. In 2022 Berkshire’s utilities and energy businesses brought in a total of $26.39 billion in revenues, 8.73% of Berkshire’s total revenue.

Today, Berkshire Hathaway Energy is composed of numerous different operations, including PacifiCorp, NV Energy, Northern Power Grid, and others, including their recently announced purchase of Dominion Energy’s assets.

The Complete Breakdown of Berkshire Hathaway’s Subsidiaries

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Manufacturing Businesses

Berkshire Hathaway has a number of different manufacturing companies, which together brought in revenue of $75.78 billion in 2022, or 25% of total revenue. Berkshire’s manufacturing businesses are categorized between industrial products, building products, and consumer products.

Precision Castparts

Precision Castparts, which was acquired by Berkshire in 2016, produces high-quality metal components that go into complex machinery such as aerospace equipment and power and energy applications.

Lubrizol Corporation

The Lubrizol corporation was acquired by Berkshire in 2011 and is currently one of the largest manufacturers of specialty chemicals, such as additives used for engines and drivelines, as well as chemicals used for home care, performance coatings, and skincare.

International Metalworking Companies (IAC)

IMC, otherwise known as ISCAR, was acquired in 2006 and is one of a few large manufacturers of metal cutting tools that are used in a variety of different applications and markets.

Marmon Holdings

Berkshire paid $4.5 billion in 2008 to purchase Marmon Holdings, which operates in a wide range of different segments, including food service technologies, water technologies, retail solutions, metal services, plumbing, refrigeration, and more.

Berkshire’s other industrial holdings include CTB International Corp, LiquidPower Specialty Products, and other, smaller corporations not laid out in their annual report.

Building Products

Separate from its industrial operations, Berkshire also owns a variety of building operations which they have acquired over the past few decades.

Clayton Homes

Clayton Homes provides both traditional on-site homes as well as manufactured homes in different regions of the United States. It is the largest supplier of manufactured and modular homes in the US. All Clayton Homes are designed, engineered, and assembled in the US.

In 2022, Clayton delivered approximately 53,000 off-site built and 11,750 site-built homes.

Shaw Industries

Shaw Industries is one of the largest carpet manufacturers in the country and currently designs and manufactures over 4000 styles of carpet and wood flooring. Shaw operates Shaw Sports Turf, Sawgrass, and Southwest Greens International, LLC, which provide synthetic sports turf, golf greens, and landscape turf products.

Shaw’s revenues are earned by selling carpets to retailers and distributors all across the country. In 2022 Shaw delivered carpet and flooring to over 46,000 retailers, distributors, and commercial users.

Johns Manville

Johns Manville was acquired by Berkshire in 2001 for just under $2 billion and offers a range of different building solutions, including insulation, roofing, fiber, and nonwovens, to markets such as aerospace, automotive, appliance, filtration, and more.

MiTek Industries

MiTek Industries supplies the residential sector with engineered connectors, construction hardware, and computer manufacturing machinery. In addition, they supply commercial businesses with construction products and services such as curtain wall systems, masonry, and light gauge steel framing products.

Benjamin Moore

Benjamin Moore manufactures and retails architectural coatings, including paints, stains, and clear finishes. Benjamin Moore products are available at over 8,000 independent retailers.

Acme Brick

Acme Brick is a manufacturer and distributor of clay bricks and concrete blocks operating primarily in the south-central and southeastern United States.

Consumer Products

Berkshire Hathaway owns a number of consumer products companies in a range of different areas, such as apparel, shoes, recreational vehicles, and batteries.

Berkshire’s apparel segment consists of Fruit of the Loom, Garan (the maker of Garanimals), and the BH Shoe Holdings Group which owns and operates a large number of separate footwear companies.

Apart from apparel, Berkshire owns many other consumer products companies, including Forest River, a maker of recreational vehicles; Duracell, the worldwide maker of alkaline batteries; Albecca Inc., which distributes high-end frames; and the Richline Group, a manufacturer and distributor of precious and non-precious metals.

Service and Retailing

Berkshire Hathaway’s service and retailing businesses brought in $38.3 billion in 2022, or 12.67% of total revenue in 2022.

McLane Company

Berkshire’s Mclane Company offers wholesale distribution services to some of the most widely known companies in the country, such as Walmart, 7-eleven, and Yum Brands, which collectively make up 41.7% of Mclane’s total revenue.

The McLane Company brought in revenues of $53.21 billion in 2022, 17.6% of total revenues.

FlightSafety International

FlightSafety provides high-tech training to pilots and aircraft maintenance technicians using advanced flight simulator technology. In addition, Flight Safety designs and manufactures flight simulators for their own use as well as to sell to airlines and military organizations.

NetJets

NetJets operates as a shared ownership program for customers wanting scale, flexibility, and access to a large fleet of aircraft. Customers acquire a specific percentage of the aircraft, allowing them to use it for a set number of hours per year.

TTI

TTI is a worldwide distributor of small electronic components, usually ordered in bulk, for a variety of different applications, including electronic manufacturing services, design and systems engineers, as well as military and commercial customers.

Other Services

Included in Berkshire’s services and retailing segment are a group of their smaller operations, including XTRA, Dairy Queen, BusinessWire, CORT Business Services, Buffalo News, and BH Media Group.

Retailing

Berkshire Hathaway Automotive

Their largest retailing business is their Berkshire Hathaway Automotive operation which, as of 2022, had 83 dealerships located in major metropolitan markets in the U.S., primarily in Arizona and Texas.

Home Furnishings Retailing

Berkshire Hathaway’s second-largest retailing segment consists of its home furnishing stores. These include Nebraska Furniture Mart, Willey Home Furnishings, Star Furniture Company, and Jordan’s Furniture. Their most notable retailing business, Nebraska Furniture Mart, operates four retail stores with a total of 4.5 million square feet of retail, warehouse, and administrative facilities.

Other Retailing

Berkshire’s other retailing operations consist of a range of other businesses, which include Borsheim Jewelry, Helzberg’s Diamond Inc., Ben Bridge Jeweler, See’s Candies, The Pampered Chef, Oriental Trading Company, and Detlev Louis Motorrad.

What Companies Does Berkshire Hathaway Own?

As of the end of 2022, Berkshire Hathaway wholly owned and operated 73 companies in total. Here’s a complete list of all companies owned by Berkshire Hathaway:

*Alleghany Corporation (“Alleghany”) is a holding company with insurance, manufacturing and service businesses.

*Marmon Holding, Inc. (“Marmon”) is a holding company that conducts operations through more than 100 manufacturing and service businesses organized into 11 business groups.

Conclusion

In total, Berkshire Hathaway subsidiaries brought in total revenue of $302.1 billion and a net loss of $22.8 billion in 2022, and it is currently the seventh largest company on the Fortune 500 list.

Losses were driven primarily by investment losses in a generally weak market, not by operations. Operating earnings rose 12% over 2021.

Berkshire currently holds over $128 billion in cash and cash equivalents waiting to be deployed into another monstrous subsidiary.

While the growth of the organization has slowed in recent years, something that was bound to happen, very few companies can match the strength and competitive advantage of Berkshire Hathaway.

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About YouTube

According to YouTube’s mission, its main goal is to give everyone a voice and show them the world. Their values are based on four essential freedoms: freedom of expression, information, opportunity, and belonging.

YouTube was not the first online video-sharing platform to offer high-definition content to users. That was Vimeo, which launched in November 2004. Although Vimeo was the first, its growth was much slower than YouTube’s.

The public was able to test YouTube in May 2005. Sequoia Capital invested $3.5 million in November 2005, and the YouTube site was officially launched in December 2005, nearly one year after Vimeo was launched.

YouTube was receiving only 8 million views per day when it was launched. In July 2006, more than 65,000 new videos were being uploaded every day, and the site was receiving 100 million video views per day. The number of views increased more than 12 times in around 7 months.

In October 2006, it was announced that Google was acquiring YouTube for $1.65 billion in Google stock. In November 2006, Google and YouTube finalized the deal. Google restructured in 2015 to create a holding company, Alphabet Inc., which now holds YouTube as one of its subsidiaries.

In 2021 YouTube grew by 37%, and it generated $28.85 billion in revenue in that fiscal year. From 2021 to 2022 growth slowed to 1.4%, possibly as a result of market saturation and competition from platforms like TikTok.

YouTube represented roughly 11.35% of all Alphabet revenue in 2022.

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What Is YouTube’s Stock Price and Ticker?

YouTube isn’t a publicly traded company, so there is no stock price or stock ticker for YouTube. YouTube is owned by Alphabet Inc., which has two tickers: GOOGL and GOOG.

How Can I Buy YouTube Stock?

As we mentioned earlier, YouTube is owned by Alphabet Inc., so it isn’t possible to buy just YouTube stock. Instead, you can invest in its parent company.

Alphabet Inc. is listed on the Nasdaq exchange under the ticker symbols GOOGL and GOOG. The difference is that the GOOGL ticker is associated with Alphabet’s class A shares and GOOG with its class C shares. The difference between the two is in voting rights. GOOG shares have no voting rights, while GOOGL shares do (one-share-one-vote).

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Conclusion

Even though it’s not possible to buy just YouTube stock directly in the stock market, investors can instead purchase stocks from its parent company, Alphabet (GOOG, GOOGL). That way, you get to partially own YouTube along with other great products and companies in Alphabet’s holding. And remember, it’s always a good idea to learn how to research and choose stock before you start picking stocks on your own, even when it comes to safe bets such as Alphabet.

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