Learn how to invest in Plaid stock when the IPO arrives. Increase your chances of receiving an allocation by opening an account with a commission-free broker that offers IPO investing to eligible customers.
Latest Plaid Stock IPO News
04/07/2021: Plaid valuation tops $13 billion in first funding after a scrapped merger with Visa
04/02/2021: Plaid Is Said Close to Financing at About $13 Billion Valuation
03/04/2021: Income verification is white-hot right now, and Plaid wants in
01/21/2021: Plaid Shareholders Field Offers at $15 Billion After Merger Collapse
01/12/2021: Visa abandons takeover of Plaid after DOJ raises antitrust concerns
What is Plaid?
Plaid is a financial technology (fintech) company that enables seamless connections between customers, financial institutions, fintech apps, and developers.
Plaid builds application programming interface (APIs) for the financial industry, including banking, lending, and investing services.
Beyond APIs, Plaid is becoming an analytics company, providing its customers with user insights and data.
The company has become a must-use platform for fintech, empowering developers at startups and legacy financial institutions to deliver a beautiful user experience.
Plaid was founded in 2013 by Zach Perret and William Hockey. Its headquarters are in San Francisco.
What Happened to the Visa Acquisition of Plaid?
On January 13th, 2020, Visa announced it was acquiring Plaid for $5.3 billion. However, in November of the same year, the U.S. Department of Justice (DOJ) filed a lawsuit to block the deal, citing antitrust concerns.
The DOJ believed that Visa was attempting to acquire Plaid to eliminate a competitive threat.
On January 12th, 2021, the companies abandoned the deal.
The antitrust lawsuit, combined with the perceived increase in Plaid’s valuation (especially in lights of the Airbnb and Doordash IPOs in late 2020), was the likely cause.
Shortly after the announcement to part ways, reports of offers to buy Plaid shares surfaced at a $15 billion valuation.
Is Plaid Stock Publicly Traded?
No, Plaid is still privately owned. The shareholders include founders, early investors (venture capital firms), and employees.
You can find a current list of Plaid investors at Crunchbase.
Plaid has raised at least $300 million in private financing since its founding.
Prominent venture capital investors include Spark Capital, Google Ventures, New Enterprise Associates, Goldman Sachs, Mary Meeker, Index Ventures, Andreessen Horowitz, Visa, and Mastercard.
Now that the Visa acquisition won’t occur, Plaid must determine its path to a public future.
The company can pursue alternative suitors, conduct a traditional IPO (or direct listing), or solicit offers to go public via a special purpose acquisition company (SPAC).
When is the Plaid IPO Date?
The Plaid IPO date is currently unknown. There is speculation that the Plaid IPO date could be sometime during 2021 now that the Visa deal has fallen through.
We won’t get a better sense of when the Plaid IPO will be until one of two things happens:
- The Plaid IPO date range leaks to the financial press
- The SEC releases a publicly-available Plaid S-1 filing
We may get clues, such as when Plaid selects a lead underwriter for the IPO or announces a confidential filing. Those types of announcements would indicate the IPO is within six to twelve months.
Even when the company and SEC publicly release the S-1 filing, we still won’t know a firm date. However, the IPO date typically occurs a month or so after the S-1 is released to the public.
Bookmark this page for the latest Plaid IPO news.
Will There be a Plaid SPAC Acquisition?
A SPAC is a special purpose acquisition company, also known as a blank check company. They are shell companies designed to help established businesses go public without a traditional IPO.
The SPAC company merges with the established company and takes on the established company’s name. It’s also known as a reverse merger.
SPACs have become popular recently after Virgin Galactic, Lordstown Motors, and Nikola used them to become publicly traded companies.
In the fintech space, SoFi is the latest company merging with a SPAC.
Using a SPAC to go public allows the company to skip the complicated and expensive IPO process. SPAC founders call companies like Plaid to convince them it would be a smart move.
Not all companies are ready to IPO, making SPACs an attractive alternative to an IPO where the company can still raise new funds.
However, the more established a company is, the more resources it can hire to facilitate the traditional IPO process.
Though we haven’t seen detailed financials, Plaid appears to be a financially solvent company with a recurring revenue model and low overhead. At an estimated $15 billion valuation, the company can likely raise more capital before going public, making a SPAC less likely.
When early investors and employees need liquidity, and the company generates more significant revenue, the company will decide on the best way to go public — a traditional IPO, direct IPO, or SPAC merger.
What is the Plaid Stock Price?
Since Plaid is not publicly traded on a stock exchange, there is no Plaid stock price yet.
An estimated price range for the IPO won’t be publicized until after the S-1 filing is made with the Securities and Exchange Commission (SEC).
What is the Plaid Stock Symbol? Plaid Ticker?
Plaid has not yet submitted public filings to the SEC. Therefore, it is not yet known what the Plaid stock symbol will be. We can only speculate.
Here is one possibility that appears to be available in the U.S.:
Will Plaid Stock be a Motley Fool Stock Advisor Recommendation?
We won’t know until after the IPO if Plaid will be a Motley Fool Stock Advisor recommendation. However, Plaid fits the mold of high-growth, disruptive business models that the Fool typically recommends.
When the Motley Fool recommends a company, there is usually an immediate spike in the price. Fool newsletter subscribers are notoriously long-term minded and rarely sell, meaning the stock price will continue to rise.
Plaid may also receive a recommendation by the Motley Fool Rule Breakers (Rule Breakers review) newsletter or other premium services. Both services have handily beaten the broader market since the early 2000s.
Read this Motley Fool Stock Advisor review to learn about the stock selection methodology and about how you can participate in excellent returns.
Stock Advisor is currently half-off at just $99 for an annual subscription.
Can you Invest in Plaid Stock? Three Potential Ways
Generally, it’s challenging to acquire shares of high demand IPOs. Most investors will need to settle for buying the stock after it begins trading.
IPO underwriters typically give their best customers access first, then allocate shares to certain institutions and brokers often tied by professional relationships.
When the largest brokers receive IPO shares, they divvy them up amongst their eligible customers, prioritizing their most valued customers first (wealthiest).
For high-demand deals, most investors will not get shares.
In recent years, a few brokers have partnered with the IPO investing app ClickIPO to give access to individual investors based on a proprietary rating instead of assets under management.
The ClickIPO rating, known as the Investor Score, rates higher those investors who hold IPO shares instead of flipping them.
Though ClickIPO has not demonstrated the ability to allocate app users with high-demand IPO shares, they’ve executed dozens of lesser-known IPOs on its platform.
For individual investors without a high net worth, ClickIPO and its partner brokers TradeStation and Webull are the most likely chance of participating in IPOs since the demise of LOYAL3 and Motif Investing.
However, joining a broker that offers access to IPOs does not guarantee a share allocation, especially in high-demand IPOs. You are probably better off waiting for the company to start trading after the IPO.
With that, here are four potential ways to own Plaid Stock:
- Buy Plaid stock after it begins trading
- Buy Plaid stock in the Plaid IPO through a broker
- Attempt to acquire Plaid stock in pre-IPO secondary marketplaces before the IPO
1. Buy Plaid stock after the Plaid IPO
Since acquiring IPO shares is almost always challenging for individual investors, the easiest way to own Plaid stock is to wait for the IPO to complete.
Realistically, unless your brokerage account is worth more than $1 million and your broker regularly receives IPO allocations, you are unlikely to get in on high-demand IPOs.
In some cases, patient investors can buy the stock at or below the IPO price. This is not always true.
The Beyond Meat IPO, for example, soared and never looked back. But Uber, which many predicted to rise steeply, actually fell on the IPO date.
Spending significant effort to acquire IPO shares may not be worth it in the end. You may also spend time and effort to obtain shares but only receive a small allocation, limiting upside gain.
Though IPOs can provide one-day gains north of 20%, even up to 100% in rare cases (such as Airbnb and Doordash), the most significant gains will come during the decade following the IPO if the company is genuinely disruptive.
Take, for example, Netflix, Amazon, or Tesla. You could have bought the stock years after the IPO and still experienced gains of more than 1,000%
If you’re an investor that wants to buy Plaid stock for the long-term, consider opening a position after the IPO and averaging down if the stock falls.
Short-term traders may angle to acquire IPO shares and hope for a short-term pop.
2. Buy Plaid stock in the Plaid IPO through a broker
Ambitious investors can position themselves to invest in the Plaid IPO once it arrives.
Your chances of getting IPO shares depends on four factors:
- IPO demand
- Your broker and eligibility
- Your assets under management at the broker
- Propensity to flip shares
As IPO demand increases, the chances of receiving IPO shares decreases. Therefore, the IPOs that are most interesting to the masses are the hardest to access.
Most online brokers do not offer IPO shares. Check directly to see if yours does, or look at our list of best brokers for IPO investing.
Legacy brokers, such as Fidelity and Charles Schwab, have minimum eligibility requirements and penalties for flipping shares (selling shortly after the IPO).
But even if eligible, the brokers must sub-allocate whatever limited shares they receive from the IPO underwriters.
This process is non-transparent, but priority is likely given to the wealthiest investors first.
For example, if your account balance is $500,000, and that makes you eligible according to terms, the broker may only have enough IPO shares to distribute to customers with assets of $3,000,000 or more.
This brings us to ClickIPO.
There is no minimum account value required.
ClickIPO prioritizes IPO share distribution by its Investor Score, which measures how likely an investor is to flip shares. Investors more likely to flip shares are considered to be less desirable IPO beneficiaries (in theory).
Therefore, ClickIPO offers a value proposition to underwriters and newly public companies.
Though quick profits from IPOs is one way the large underwriter reward whale-sized clients.
Click here to subscribe to Access IPOs and download the free 15-page eBook, How to Invest in IPOs – A Fundamental Guide for Ordinary Investors, which provides more detail on this dynamic.
Regardless of the four factors above, there is never a guarantee that any investor will receive a share allocation.
3. Attempted to acquire shares in pre-IPO secondary marketplaces
Founders, early employees, and investors often find themselves in a difficult predicament. They own valuable shares of a company that doesn’t trade publicly.
These shareholders might have multi-million dollar net worth’s because of their stock holdings, but the stock is not liquid because it doesn’t trade on an exchange.
A few platforms have evolved to gives these individuals a way to liquidate their holding before the IPO. Two of the more prominent sites are EquityZen and Sharespost.
Both sites bring liquidity to an otherwise illiquid asset. Accredited investors (those with invested assets > $1,000,000) may join these sites and attempt to buy these companies’ shares when they become available.
The shares are only offered to accredited investors because the company’s financials are not publicly filed with regulators yet, increasing the investors’ risk.
For high-profile companies, demand is high, lowering your chances of acquiring shares. The author considers this a low-likelihood way to acquire shares. However, some readers have written with success stories buying shares this way.
Where can I find the Plaid S-1 Filing?
The Plaid S-1 filing won’t be publicly available until released. Once it is public, we’ll post it here.
You can find a real-time SEC feed of the latest IPO filings from other companies on the recent S-1 filings page.
Best Brokers to Buy Plaid Stock
What is the best online brokerage for buying Plaid stock?
See the complete list of best brokers for IPO investing here.
Joining a broker that offers access to IPOs does not guarantee a share allocation, especially in high-demand IPOs. You are probably better off waiting for the company to start trading after the IPO.
Long-term buy and hold investors may prefer a broker not as geared toward frequent trading.
As an individual investor, you’ll want to open an account with a commission-free online broker. That way, you’ll invest most of your money instead of waste it on fees.
I’m a big fan of the online brokerage M1 Finance. M1 Finance is a reliable and robust, no-fee online broker for beginner to advanced investors.
As your investing skills and portfolio mature, M1 is one of the best platforms to scale.
Investing in stocks is 100% free on the platform. They also offer an integrated checking account and low borrowing rates. Read my complete M1 Finance review here.
The platform is more intuitive than old school brokers because it’s built on a modern technology platform. You create portfolio “pies” that contains all the stocks and ETFs you want to own and in what percentages. Add Plaid stock to your portfolio pie once it begins trading.
M1 Finance does not offer IPO access. But it’s my favorite for long-term investing, which is my preferred strategy for disruptive IPO companies.
* Disclosure: The web page contains affiliate links from our partners. If a reader opens an account or buys a service from a link in this article, we may be compensated at no additional cost to the reader. Opening an account with a broker that provides access to IPOs does not guarantee the customer allocations of specific IPOs. The author is long V, MA, TSLA, ABNB, BYND.