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Airtasker (ASX:ART) share price cools after explosive IPO

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The Airtasker Ltd (ASX: ART) share price has cooled off significantly during the trading day. However, shares remain well above their initial listing price. Airtasker officially IPOed this morning after a false start this week and months of anticipation. The company had a listing price of just 65 cents, but opened this morning at $1.01 a share, meaning company insiders and investors were treated with a 55% win right off the bat.

At the time of writing, the Airtasker share price is currently sitting at $1.05, up 0.48%. 

Airtasker share price rockets

However, it wasn’t all smooth sailing for investors looking to get into this IPO after trading commences (which is almost all retail ASX investors).  Airtasker’s share price then went as high as $1.16 a share. This was prior to falling as low as 88 cents soon after market open. This company had a more volatile start to life than a giraffe!

At the time of writing, Airtasker shares are back to $1.02 a share, almost where they started the day.

IPOs can be ART-fully dangerous for new investors

Of course, Airtasker’s listing is nothing the ASX hasn’t seen before. Last year saw a smorgasbord of new companies hitting the ASX boards. These included Doctor Care Anywhere Group (ASX: DOC), Booktopia Group Ltd (AS:X BKG), Plenti Group Ltd (ASX: PLT), Nuix Ltd (ASX: NXL), Payright Ltd (ASX: PYR) and Laybuy Holding Ltd (ASX: LBY).

With the exception of Doctor Care, all of these companies are today trading below the price they IPOed at. And even Doctor Care was down 17% at one point from its IPO price before recovering. Laybuy has been a clanger, currently more than 47% below its IPO price.

We have seen a similar trend play out in the United States. Companies like Uber Technologies Inc (NYSE: UBER), Lyft Inc (NASDAQ: LYFT), and Snowflake Inc (NYSE: SNOW) have all IPOed in the last couple of years, and have been highly volatile in the months and/or years since.

IPOs can be dangerous things for retail investors to get involved in at the starting gate, despite all of the hype and buzz they generate. Remember, its often the motivation of those pushing the IPO to offload their shares for the highest price possible. So for any investor thinking about jumping on the Airtasker train, it might be prudent to keep all of this in mind!

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Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Snowflake Inc. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Booktopia Group Limited, Doctor Care Anywhere Group PLC, Nuix Pty Ltd, and Uber Technologies. The Motley Fool Australia has recommended Doctor Care Anywhere Group PLC and Nuix Pty Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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