While the greenback symbolizes American power and influence, cash increasingly is fading in favor of more convenient platforms. This was true before the COVID-19 pandemic. However, the global health crisis accelerated the trend toward digital and mobile payment platforms. Even countries with historically high cash usage are jumping on the digital bandwagon. A wide range of consumers will come into contact with this technology, and that’s outside the stock market. But, where does a technology company intersect with card products.
This is particularly why interest in Marqeta, a payment infrastructure technology firm, is sky high. Using an application programming interface (API) platform to craft custom-made payment solutions for enterprise-level clients, Marqeta’s debut made waves, and the stock is performing well as the economy attempts a turnaround in the face of the COVID-19 pandemic. Remember, innovative products involving credit cards do more than make transaction easy, they also make them safe.
When Did Marqeta IPO?
Marqeta IPO’d on Wednesday, June 9, 2021. The stock began trading at $32.50, higher than the $27 projection from the day before. By the end of the day, the firm’s market cap was $16 billion.
Marqeta Financial History
In most cases, the COVID-19 pandemic imposed an utterly devastating impact to business because of federal and state authorities clamping down on nonessential activities. Very quickly, commercial hubs, whether that be shopping centers, entertainment venues or airports, became ghost towns. Logically, this killed revenue streams for multiple industries that were not associated with essential goods and services. Remember, the companies with the best business practices still need to offer financial services that are easy to use.
However, Marqeta was one of the lucky few whose fundamental valuation — telehealth specialist Teladoc Health (NYSE: TDOC) being a shiningly rare example — essentially increased because of the pandemic. Yes, it was needed, but it was also easy. to use. Consumers didn’t necessarily want to drop their spending. Rather, they sought avenues to practice their spending safely and conveniently. Thus, the U.S. Census Bureau reported a massive increase in e-commerce retail sales following the coronavirus outbreak and subsequent lockdowns.
Specifically for Marqeta’s business, the company posted revenue of $290.3 million for the full year of 2020, which was up nearly 103% from the prior year’s tally of $143.3 million. Just as importantly, Marqeta pared down its net loss to $47.7 million in 2020, comparing favorably to a net loss of $58.2 million in 2019.
What’s more impressive, though, is that Marqeta generated top-line sales of almost $108 million for the first quarter of this year. Not only was this figure up 123% year-over-year, at this rate the payment infrastructure company could hit well over $400 million in revenue for 2021.
Marqeta’s biggest customer is payment processing platform Square (NYSE: SQ), which leverages the fintech firm’s API technology to enable Square’s Cash Card users to spend funds directly from their mobile wallet. Other major clients include Uber (NYSE: UBER), DoorDash (NYSE: DASH), Afterpay (OTCMKTS: AFTPF) and Klarna.
Once the initial hype dies down, market insiders and professionals dump out, leaving less-sophisticated retail investors holding the bag.
Marqeta has true substance behind its proposition. First, the shift toward payment mobility is a trend that no one can deny. For instance, while Harvard Business Review argued that the circumstance is nuanced, it stated prior to the pandemic that momentum in cashless transactions is clear.
Following the pandemic, the trend is even more powerful and overt. According to industry experts, the global digital payments market could reach $6.6 trillion in value by the end of this year. That translates to a 40% jump in a 2-year period. Further, the mobile payments market could nearly double its current valuation and hit $4.6 trillion by 2025.
Second, Marqeta developed tremendous brand presence and reputation since incorporating in 2010. Again, some of the biggest names in the sharing economy find substantial value in Marqeta’s payment network ecosystem. In addition, the competition will encounter challenges going up against the fintech giant largely because many of the smaller rivals offer less sophisticated payment and credit solutions.
How to Buy Marqeta (MQ) Stock
Buying at the open is easy. If you know how to buy stocks, you can jump right in. If not, follow the simple steps below.
Step 1: Pick a brokerage.
During the advent of the internet, the idea of online brokerages sprouted and caught like wildfire. But despite their popularity, picking the right platform was stressful because of the variance in fees involved.
More recently, the introduction and proliferation of free or low-cost mobile trading apps presented a much-needed consumer improvement in the brokerage space. Today, to stay competitive, most brokerages offer similar incentives, such as commission-free trading.
This dynamic leaves you free to choose the platform that best suits your lifestyle and investing ambitions. For those who work hectic schedules, you may find a mobile app works just fine. On the other hand, those who want to develop their trading acumen should consider robust platforms with strong educational materials.
Below are the best brokers to consider.
Step 2: Decide how many shares you want.
Deciding the number of shares to purchase is a critical component of your broader investing strategy because this determines your risk-reward profile. The more shares you own, the more exposed you are to either the target stock’s upside movements or downside failures. Therefore, it’s wise to only buy the greatest number of shares for your highest-conviction trades.
No matter what you decide, make sure to come up with your share count number before the market opens. You want to make this choice rationally, not emotionally.
Step 3: Choose your order type.
Before taking the plunge on this IPO, make sure you understand the below concepts and the differences among order types.
- Bid: The bid is the highest price a buyer will offer. It is always lower than the ask.
- Ask: In contrast, the ask is the minimum price that a seller will accept. It is always higher than the bid.
- Spread: This is the difference between the bid and ask price. The spread also signifies market liquidity and risk. Narrower spreads indicate higher liquidity levels and lower risk due to buyer availability, while the opposite is true concerning wider spreads.
- Limit order: To buy a stock at a specific price, place a limit order. Please note that there’s no guarantee a limit order will be fulfilled.
- Market order: To buy shares at the going rate, place a market order, which executes at the next available price. The terms are least favorable to you, with buy orders executing on the ask and sells on the bid.
- Stop-loss order: A stop-loss order is a protective function that automatically exits you out of your holdings at either a predetermined price or the next available price, whichever comes first. Be aware that an opening price much lower than the prior session’s close (i.e., gap-down session) could lead to disappointingly deep losses.
- Stop-limit order: Stop limits only fulfill at a predetermined price, which gives you greater transparency. But if the stock’s price continues to fall following a gap-down session, you would have been better off with a stop-loss order.
Step 4: Execute your trade.
- To execute a market order, follow these steps:
- Select action type (buy or sell).
- Enter the shares you want to acquire (or sell).
- Hit the buy (or sell) button.
Limit orders follow the same steps above, with the exception that you must enter your desired price of execution.
Potentially Worth the Hype
Thanks to its one-stop access connecting enterprise-level clients to the vast payment ecosystem, Marqeta fosters custom-made financial solutions for end-users. Additionally, the COVID-19 crisis accelerated demand for digital and mobile payment platforms, making MQ incredibly relevant.