ETFs In Focus On Stunning BigCommerce IPO

E-commerce software provider BigCommerce Holdings Inc. BIGC made a stunning debut on Nasdaq on Aug 5 as its shares soared by triple digits during the first day of trading. This represents the second-biggest gain this year on a U.S. exchange at the opening bell for a newly public company that has raised at least $100 million, according to data compiled by Bloomberg.

Trading had halted two times during the day — one when the price skyrocketed to $79.40 within three minutes of opening and another when prices surged to $91.80.

The IPO pushed BigCommerce’s market capitalization to more than $5.4 billion. The company has raised nearly $216 million through the IPO offering of 9 million shares at $24 higher than the anticipated range of $21-$23. The company had increased the price range from $18-$20 per share on huge investor demand.

BigCommerce: A Good Bet?

BigCommerce is a leading software-as-a-service (SaaS) eCommerce platform that empowers merchants of all sizes to build, innovate, and grow their businesses online. In its IPO filing, the company said that its platform “simplifies the creation of beautiful, engaging online stores by delivering a unique combination of ease-of-use, enterprise functionality, and flexibility.”

The software company manages some 60,000 online stores across industries worldwide. It reported revenues of $33.2 million and a net loss of $5.8 million in the three months ended Mar 31. BigCommerce competes strongly with Shopify (SHOP), which has rallied more than 170% so far this year.

As e-commerce has been growing exponentially due to the COVID-19 pandemic, investors are jumping into the space to cash in on the opportunity with the newly minted company.

ETFs in Focus

The successful market debut of BigCommerce could pave its entry into a number of ETFs in the coming days. We have highlighted these below.  

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. The fund currently holds 42 stocks in its basket, with each accounting for less than 10% exposure. Technology is the top sector accounting for 42.9% share while healthcare and consumer discretionary round off the next two spots with double-digit allocations each. The fund has amassed $99.8 million in its asset base while it trades in a light volume of about 89,000 shares, probably implying additional cost beyond the expense ratio of 0.60%. The product has surged 49.7% so far this year.

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