Contributor, Benzinga
December 13, 2021
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If any episode from the classic archives of The Twilight Zone is most emblematic of the early months of the COVID-19 pandemic, it would surely be “Time Enough at Last.” An avid bookworm whose occupation as a bank teller increasingly interrupts his ultimate passion in literary fantasy, Henry Bemis — played by Burgess Meredith — fortuitously survives a massive nuclear explosion.

Initially knocked unconscious from the blast, Bemis emerges from the bank vault that saved his life. Soon, he discovers that he's the only survivor, leaving him in a despondent state. However, his mood immediately picks up when he discovers the ruins of a library with its books still intact. But as he reaches for one on the floor, he trips and accidentally breaks his glasses, turning great fortune into agonizing misery.

In parallel, millions of Americans can sympathize with the fictional character Bemis. When the COVID-19 crisis initially struck the U.S., it rendered major metropolitan areas to ghost towns. That let worker bees have a relaxing commute — but where would they be going exactly?

Similarly, government stimulus enabled consumer households to amass significant savings, yet supply chain backlogs stymied their acquisitive desires. But that’s where the upcoming initial public offering (IPO) of Samsara, an end-to-end Internet of Things (IoT) services provider, can help restore balance in the new normal.

When Is the Samsara IPO Date?

One segment that experienced no fallout from the ongoing pandemic is the IPO market. Indeed, you can make an argument that the global health crisis lit the sector’s fuse. With millions of white-collar workers transitioning from the cubicle to the living room, the extra time — and the absence of the peering eyes of a supervisor — enabled retail-level stock market trading to blossom at an unprecedented rate.

Certainly, the numbers speak for themselves. From a recent Reuters report, with only weeks remaining in 2021, “U.S. IPOs have totaled $301.26 billion in 2021, scorching past last year's record of $168 billion, according to Dealogic.” Yet a slew of private enterprises seeking the siren call of the public arena ensures that December will go off with a bang.

Among the most anticipated public market debuts, Samsara will cement its presence on the IPO calendar on Dec. 15. It will compete with a number of recently launched special purpose acquisition companies (SPACs) offering merger opportunities across a range of relevant industries, including healthcare and financial technology (fintech).

While rival IPOs are always a concern because of the economic principle of limited resource allocation, Samsara may be in a league of its own. Primarily, the size of the deal is massive. Per its prospectus filed with the U.S. Securities and Exchange Commission (SEC), management plans to offer 35 million shares at a price between $20 to $23.

Should the IPO secure the highest end of the pricing spectrum at the terms above, Samsara will raise $805 million, which will see the IoT specialist command a market valuation of approximately $11.5 billion. Not only that, the company reserves 5.25 million shares for its underwriters if they want to exercise this overallotment option.

The joint bookrunners on this deal feature several financial powerhouses, most notably Morgan Stanley (NYSE: MS), Goldman Sachs (NYSE: GS) and JPMorgan Chase & Co. (NYSE: JPM). Shares will trade on the New York Stock Exchange under the ticker symbol IOT, appropriately enough.

Under its core cloud-computing-based business, Samara provides sensors and cameras, recording data on transactions, transportation and workflows for eventual parsing into actionable insights. For its enterprise-level clients, the benefits include the identification of supply chain and workflow backlogs and the presentation of alternative solutions.

Just as importantly, Samsara’s proprietary protocols help monitor workplace behaviors, red-flagging safety violations and promoting corrective mechanisms. With supply chain on everyone’s mind, the debut of IOT stock couldn’t come soon enough.

Samsara Financial History

Easily one of the most robust tailwinds lifting IOT stock from other new market issues is the underlying total addressable market. According to Fortune Business Insights, the global IoT market size reached a valuation of nearly $309 billion in 2020.

Based on its analysis, the segment will grow to $381.3 billion by the end of this year and reach over $1.85 trillion by 2028, representing a compound annual growth rate (CAGR) of 25.4% from 2021 to the end of the forecasted period.

While the above projection may sound fantastical, other sources provide the target credibility. For instance, rival research firm Mordor Intelligence anticipates that by 2026, the global IoT market will command a value of nearly $1.39 trillion. True, different firms may use different components to calculate their figures. Nevertheless, these two projections being close together provides confidence for IOT stock.

Moreover, Samsara’s operations encompass improvements in both efficiency and safety. According to the Centers for Disease Control and Prevention, 1,270 fatal work-related motor vehicle crashes occurred in 2019, and “Among these 1,270 deaths, the Transportation and Warehousing industry had the highest share (41%), followed by Construction (12%), Wholesale and Retail Trade (9%) and Administrative and support and waste management and remediation services (7%).”

Through Samsara’s connected cloud-based IoT platform, it can identify risk factors before they tragically materialize into irreversible incidents. Not only can the technology save devastating financial costs, it can help prevent unspeakable pain for workers’ families.

What really intrigues prospective investors of IOT stock, though, is that the company’s financials align with the attractive narrative. In the fiscal year ending Jan. 30, 2021, Samsara generated revenue of $249.9 million, up more than double the $119.9 million posted one year ago.

Even better, the IoT firm has demonstrated serious momentum in 2021. In the 9 months ending Oct. 30, Samsara rang up $302.6 million on the top line, a 74% increase from the $174 million posted in the year-ago period.

Still, no IPO is without risk. In this case, profitability will be a concern. During its fiscal 2021, the company’s operating loss was $209.5 million. To be fair, operating losses narrowed to $102.1 million in the first three quarters of this year. However, Samsara will need to maintain forward progress to justify its valuation premium.

Samsara Potential

Recently, The Wall Street Journal reported a disturbing figure: the consumer price index increased 6.8% in November, resulting in inflation hitting a 39-year high. Although several contributing factors exist, one of the most obvious sources is the ongoing supply chain backlog imposing supply and demand imbalances.

However, connected technologies may provide the answer. By integrating equipment, vehicles and workflows in a digital ecosystem, IoT specialists like Samsara can quickly identify trouble spots and more importantly, prepare solutions. Invariably, the current crisis involving global inventory shipments helps bolster the bullish case for IOT stock.

Still, the challenge regarding the COVID-fueled backlog may be much more complex than any one entity can cure. For instance, longshoremen typically receive compensation by the hour but truck drivers’ wages are tied to their miles driven. Therefore, you have an economic conflict — longshoremen don’t want to work too quickly but truck drivers don’t receive any compensation at all for waiting at the docks.

No connectivity protocol can resolve this issue, which may require a large-scale overhaul that extends well beyond the scope of IOT stock.

How to Buy Samsara IPO (IOT) Stock

If you choose to acquire IOT shares at the open, you’ll need to know how to buy stocks. If you don’t, follow the steps below.

Step 1: Pick a brokerage.

You can’t go anywhere without having a brokerage. These days, the best brokers compete on similar financial incentives, so choose one that works ideally for you.

Step 2: Decide how many shares you want.

Every IPO is risky, particularly risk-on names in a risk-off environment. Therefore, use a balanced share count.

Step 3: Choose your order type.

Before trading, learn 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:

  1. Select your action type (buy or sell).
  2. Enter the shares you want to acquire (or sell).
  3. Hit the Buy (or Sell) button.

Follow the same sequence for limit orders (but include your execution price).

IOT Restrictions for Retail Investors

Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating in an IPO. Don’t join in the deal if you have privileged information.

IOT Pre-IPO

If you want to acquire IOT stock at its pre-IPO (initial offering) price, you may open an account with Freedom Finance. From there, you can submit an application for acquiring pre-IPO shares. Please note that the deadline is Monday, Dec. 13.

A Solution Amid a Multitiered Crisis

With the desire to accumulate various goods stymied by supply chain disruptions, Samsara’s IPO arguably couldn’t be more fortuitously timed. However, the complex nature of COVID-19 means that even IOT stock is not guaranteed an easy ride to the upside.

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About Joshua Enomoto

His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.