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Another Tech IPO Soars: ETFs in Focus

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Shares of Eventbrite, an online ticketing company, rose nearly 70% on Sep 20, its debut trading day. On the first-day gain basis, this IPO has witnessed one of the biggest gains in the recent months. It trades on NYSE under ticker symbol EB (see: Total Market (U.S.) ETFs).

The company kept its IPO price at $23 and was able to raise $230 million. As a consequence, implied valuation shot up to more than $1.76 billion. Per SurveyMonkey, it has been credited as the best tech-IPO candidate (read: Big Tech Reshuffle & A New FANG ETF).

It created the online service for live ticketing nearly 12 years ago. The idea was to simplify organizing and passing on tickets for free and paid live events. The goal was to shift social-media-centric relations into more face-to-face outings.

The company provides aid to event organizers in marketing and other related areas. It focuses on events that have limited audience appeal and faces competition from several narrowly focused startups. “We really are focused on investing in the future, and so whether that’s expanding into more categories or countries, that’s really where we’re focused,” said Eventbrite CEO Julia Hartz.

The August IPO filing reported that the company issued 201 million tickets for 3 million events last year, of which 46.7 million of those tickets were sold. This filing also mentioned that proceeds from stock sale would partly go for paying outstanding debts. The company reported $15.6 million loss for the first half of the year while filing its initial prospectus last month.

There have been numerous tech IPO that have being successful over the past 12 months. In March, Dropbox was able to raise $756 million and its shares jumped nearly 36% on the first day of trading. Recently, PluralSight Inc, an online learning provider collected $310 million in IPO.

Per Dealogic, $35 billion have been raised by 120 companies that filed IPOs in the first half of the year (read: Top-Ranked ETFs That Have Crushed the Market).

This overwhelming response to yet another IPO draws attention to the following ETFs:

Renaissance IPO ETF (IPO - Free Report)

This fund provides exposure to the largest and most-liquid newly listed companies by tracking the Renaissance IPO Index. New companies seek inclusion on a fast-entry basis on the fifth day of trading. Companies that have been public for two years are removed at the next quarterly review. Spotify Technology SA (SPOT - Free Report) holds the top-weight of nearly 6%. AUM is $19.7 million and expense ratio is 0.6%. It has returned nearly 9.3% year to date. Zacks has a Medium risk outlook toward it.

First Trust US IPO Index Fund (FPX - Free Report)

This ETF focuses on the largest, best-performing and most-liquid U.S. IPOs and follows the IPOX-100 U.S. Index. New companies can find entry into the fund’s holding after trading for a minimum of 100 days. It tracks the IPOX-100 U.S. Index. PayPal Holdings Inc (PYPL - Free Report) (8.65%) is the top-weight holder in the fund. AUM is $1.21 billion and expense ratio is 0.59%. It has returned 10.5% year to date. Zacks has a Medium risk outlook toward it.

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