Investors will have an opportunity to profit from recent initial public offering The Trade Desk(TTD) - Get Report in the upcoming week by establishing a long position in the stock before the expiration of the quiet period on Monday.
After that period ends, the company's strong roster of underwriters will be allowed to issue detailed reports about the IPO. These reports will likely be overwhelmingly positive because the company has solid fundamentals and a great management team, and the IPO had strong pricing and performance.
To take advantage of the likely uptick after the underwriting reports are released, investors should build a long position in shares of the company over the remainder of the trading week. When the reports are released, investors should ride the shares higher and then sell their positions.
The Trade Desk is a technology company that provides a platform for advertisers to purchase online advertisements. Those advertisers can customize the ads and then share them with their chosen target customers.
Customers create these ads using a self-service platform that then allows them to manage their ad campaigns over different types of digital formats. These formats include display, social media and video to reach customers via computer, mobile and television.
The Trade Desk's inception dates to 2009, and it is based in Ventura, Calif. The company's stated goal is to improve advertising by allowing ad buyers to have one-on-one customized interactions with potentially billions of people.
Before joining The Trade Desk in 2009, Chief Executive Jeff T. Green, who is also president and a director, founded the first online-ad-exchange network, AdECN, which Microsoft bought in 2007. In addition, he served on the network and exchange quality and assurance committee of the Internet Advertising Bureau in 2011 and 2012.
The Trade Desk's Founder and Chief Technology Officer David R. Pickles has previous experience building Internet delivery systems.
In terms of financial results, after generating net income of just $5,000 in 2014, The Trade Desk's net income reached $15.9 million last year. Adjusted earnings before interest, taxes, depreciation and amortization also jumped, with The Trade Desk generating $5.7 million of adjusted EBITDA in 2014 and $39.2 million of adjusted EBITDA last year.
The company's revenue growth was also notable. The Trade Desk generated revenue of $44.5 million in 2014 and nearly $114 million last year.
Shares of The Trade Desk priced at the high end of an adjusted range. The Trade Desk's original range of $14 to $16 a share was raised to $16 to $18 a share before the IPO, and it priced at the high end of this range, at $18.
When the stock debuted on Sept. 21, it jumped 60% from the IPO price. The stock's performance has been strong since then, trading as high as $33.40 and closing at $25.52 on Tuesday.
The Trade Desk's heavy-hitting list of global underwriters includes Citigroup, Jefferies and RBC Capital Markets. Co-managers for the offering include Needham and Raymond James.
This IPO is one of the more impressive ones recently. With the IPO market heating up, investors should pay close attention to this second opportunity to profit: the expiration of the quiet period.
This article is commentary by an independent contributor. At the time of publication, the author owned TTD.