Should I buy Moonpig shares this week following the IPO?

first_img See all posts by Jonathan Smith Jonathan Smith | Wednesday, 3rd February, 2021 Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Moonpig (LSE:MOON) is a well-known online personalised greetings card retailer. It has expanded into flowers and other personal gifting, but remains best known for the cards arm of the business. It had operated as a private limited company for many years, but went public yesterday via an initial public offering (IPO). The IPO put a value of £1.2bn on the company, and Moonpig shares rose as high as 29% in early trading. I can buy it for my ISA from Friday onwards. So is it worth me jumping on the bandwagon at the end of the week?What do I know?One of the issues with buying a company when it has just had an IPO is the lack of transparency. Listed firms need to give regular trading updates to shareholders and have greater transparency requirements. This makes it easier for me to research and judge if I should invest or not. For Moonpig, I don’t have that much information to go on.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Looking at the latest results I have access to, I can see why Moonpig shares rallied first thing. In the full-year results to April 2020, revenue was up 44% to £173m. In fact, revenue has grown at an average rate of 13% per year for the past few years. Such continued growth is harder to achieve as the company gets larger, so the 44% figure is very exciting to see.I don’t have much information on how the company has coped with Covid-19, but the optimism around the IPO leads me to conclude that the business isn’t struggling. This makes sense when you consider the business model. The online presence of Moonpig means no retail shop overheads and no physical stores it had to shut during lockdowns Also, cards and parcel orders have been on the increase since Covid-19 hit.These fundamental reasons are why I think Moonpig shares started life strongly yesterday.What’s the risks of buying Moonpig shares?There are risks, of course. One of the biggest is simply buying just as the shares are listed. This is a time when things are very choppy. The founders usually sell some of their shares in this period. This is offset by investors like me and institutional investors buying shares. So naturally the share price is quite volatile to begin with. This choppiness can lead to large short-term swings, something I need to be aware of with Moonpig shares.Further, the valuation of Moonpig is only an estimate, and could be overhyped. In this case, the market will naturally fall to a level that most people think is fair. For example, take Aston Martin Lagonda. The IPO price was set at £19, and the share is now trading at just £2.20 only a few years later. I don’t think this will happen to Moonpig, but again it’s a risk.From my point of view, I do think that Moonpig could be a good buy due to the sustainable business model and lack of physical cost bases. It’s got a proven track record over several decades. But I’m going to sit out the initial choppy IPO period and wait for a month or so before looking to buy. “This Stock Could Be Like Buying Amazon in 1997” Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Should I buy Moonpig shares this week following the IPO?center_img Enter Your Email Address Our 6 ‘Best Buys Now’ Shares Simply click below to discover how you can take advantage of this. Image source: Getty Images I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. 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