Invariably, it’s the moment at which the most treasured experiences and attributes are threatened that people take stock of their true importance. That’s according to a Pew Research Center report published earlier this year, which described how the global health crisis dramatically changed the lives and relationships of Americans everywhere. In short, many respondents stated that while the pandemic was disorienting, they took the time to lean on their social networks.
Naturally, the same reflection occurred in the business world. At the most obvious level, the World Economic Forum reported that companies across the globe recognized the vulnerabilities in their employees’ working conditions, which the SARS-CoV-2 virus cruelly exposed. Further, the study indicated that companies with “robust governance and a responsible business approach are likely to dominate their sectors after this recession.”
But perhaps the biggest and most effective change that enterprises can implement is the digital transformation or the adoption of underlying technologies to improve efficiencies, enhance value and spark innovation. Already a multi-billion-dollar industry, digital transformation will likely rise in significance because of intense business interest and demand.
Organically, then, end-to-end digital solutions provider CI&T Inc. stands poised to collect downwind benefits, thus drawing interest for its initial public offering (IPO).
When Is the CI&T IPO Date?
Based in São Paulo, Brazil, the upcoming debut of CI&T on the pages of the IPO calendar is fundamentally significant for 2 reasons. First and foremost, the company is one of the world leaders in digital transformation integration services, featuring several top international blue chips as clients. Second, CI&T’s rise encourages investors to consider Brazil and the rest of Latin America as more than just a natural resource play.
Brazil features a reasonably favorable population pyramid, with most people in the country being of working age, and enjoys a sizable youth population to bolster the nation’s workforce as older individuals retire. The whole of Latin America showcases similar trends, implying that CI&T’s home region should provide adequate ground for expansionary endeavors.
Founded in 1995, CI&T initially started off as an information technology (IT) company, specifically working in research and development for software applications. Gradually, the tech firm became a leader in the digital transformation, helping companies boost their bottom line through integrating core aspects of their business — such as data migration to the cloud — with the latest innovations.
Earlier this month on Nov. 1, CI&T announced the terms of its IPO, which will consist of 19.44 million shares distributed: 11.11 million from CI&T and 8.33 million from certain selling shareholders, per a corporate press release. At the time of the disclosure, management estimated that the price range will fall between $17 and $19 per unit.
Shares of the tech firm will make their debut on the New York Stock Exchange on Nov. 10 under the ticker symbol CINT. Goldman Sachs (NYSE: GS), Citigroup Inc. (NYSE: C), JPMorgan Chase & Co. (NYSE: JPM), Morgan Stanley (NYSE: MS), Itau Unibanco Holding (NYSE: ITUB), Bank of America (NYSE: BAC) and Banco Bradesco (NYSE: BBD) represent the joint bookrunners for the IPO.
With such a large underwriting base, prospective investors of CINT stock have some assurances of a strong showing as these powerhouse financial institutions will market the offering to their clients. Still, IPOs are always risky because of a large number of variables, so you must be prepared for potential volatility.
CI&T Financial History
As referenced earlier, the global digital transformation industry is a massive market. According to Grand View Research, the sector reached a valuation of $336.14 billion in 2020, despite the destruction of the COVID-19 pandemic. But it’s the pandemic itself that could be the biggest catalyst for the sector as the crisis forced an unprecedented wake-up call for the business world.
As Miguel Alcaine, head of the International Telecommunication Union area office in Central America noted, “The status of digital transformation before COVID-19 was directly proportional to a country’s resilience. The digital world has shown us preexisting human conditions on steroids. Unconnected people living in urban areas have been the most affected.”
However, the opportunity is that organizations of all stripes can learn from this crisis. “One thing that has changed for the time being as the pandemic evolves is the general awareness that digital transformation is a must. Even those in politics realize that now. We need to work to take advantage of this window of opportunity, which might close after the emergency abates,” stated Alcaine.
Taking the realization of the digital transformation’s importance into account, Grand View Research reports that revenue for the sector could hit $1.76 trillion by 2028. A remarkable tally, this figure would equate to a compound annual growth rate (CAGR) of 23.6% between 2021 through 2028. While such an impressive call will surely generate at least some skepticism, the overriding reality is that enterprises now recognize the need for next-generation solutions to solve next-generation challenges.
Potentially, the debut of CINT stock could allow investors favorable exposure to this rapidly burgeoning market. Based on the terms of its IPO, the underlying company will command a market value of $2.4 billion following gross proceeds of $350 million from the deal.
In 2020, CI&T reported revenue of 1.16 billion Brazilian Real, equating to roughly $211.8 million under the current exchange rate. This tally represented an increase of 71% from 2019’s sales result. Further, over the trailing 12 months ending June 30, 2021, the company generated $223 million in revenue.
Also noteworthy is that the company is profitable, posting net income of 122.2 BRL in 2020 or approximately $22.3 million. Therefore, investors have assurances that they’re buying into an already viable business, which is not always the case with IPOs.
The upside potential of CINT stock rests largely on the silver-lining thesis; that is, organizations are turning tragedy into meaningful action. Prior to the pandemic, CI&T counted business heavyweights like Johnson & Johnson (NYSE: JNJ), Alphabet (NASDAQ: GOOG, NASDAQ: GOOGL), Itau Unibanco Holding (one of the IPO underwriters), Coca-Cola (NYSE: KO) and Telefonica (NYSE: TEF) as customers.
Further, as Edson Prestes, a professor of computer science at Federal University of Rio Grande do Sul, Brazil stated, “COVID-19 showed us how dependent we are on technology. Access to the internet as a human right is an urgent subject that should be included in the agendas of all governments as a priority.”
Given that technologically robust and resilient communities fared better during this crisis than less-equipped areas, the rolling out of digital transformation across all enterprises — public, private and non-profit — could represent long-term growth catalysts for CINT stock.
While the narrative for advanced tech sounds compelling, several underlying economic factors are just plain awful. Of tremendous importance — and a massive red flag — is what The Wall Street Journal stated was a pandemic hangover. Essentially, the desperate straits that corporations found themselves in at the start of the COVID-19 pandemic collectively put U.S.-based enterprises under an ominous debt cloud amounting to $11 trillion.
True, circumstances look fine for now. However, more shocks to the system could send a torrential liabilities downpour that would surely ripple to every corner of the global economy.
How to Buy CI&T IPO (CINT) Stock
With CINT stock set to make its debut shortly, retail investors must buy shares at the open. This process is straightforward if you already know how to buy stocks. If not, follow the steps below.
Step 1: Pick a brokerage.
Thanks to competition and the rise of connectivity technologies, virtually all consumer-level brokerages feature similar financial incentives. This circumstance allows you to choose your best brokers based on the attributes you care most about.
Step 2: Decide how many shares you want.
Unlike blue-chip stocks, IPOs are extremely risky because you’re stepping into the unknown. Therefore, mitigate downside potential by choosing a balanced share count.
Step 3: Choose your order type.
Before investing, understand these market concepts.
- Bid: The buyer’s best offer for a stock.
- Ask: The seller’s lowest acceptable price.
- Spread: The difference between the bid-ask price, the spread indicates market risk as this is also the profit margin for market makers.
- Limit order: Buy or sell requests at a predetermined price, limit orders provide transparency but no execution guarantees.
- Market order: Market orders guarantee fulfillment but only at the current rate.
- Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower.
- Stop-limit order: Stop-limit orders only leave positions at a specified price, but they also carry non-fulfillment risks.
Step 4: Execute your trade.
Follow these steps to execute a market order:
- Select your action type (buy or sell).
- Enter the shares you want to acquire (or sell).
- Hit the Buy (or Sell) button.
Follow the same sequence for limit orders (but include your execution price).
CINT Restrictions for Retail Investors
Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating. Avoid engaging if you have access to privileged (non-public) information.
Companies like ClickIPO have begun democratizing the public market debuts by issuing shares of select opportunities at their initial offering (pre-IPO) price. Typically, you must apply for participation several days in advance of the IPO.
Relevant Tech to Face Tomorrow’s Challenges
As the COVID-19 pandemic brutally taught the business community, digital transformation is no longer a theoretical musing but an absolute necessity. Frankly, those that transitioned digitally fared better than those that didn’t. While this dynamic bodes favorably for CINT stock, prospective investors should check the headlines before making significant commitments.