JFrog IPO: How to buy JFrog shares (FROG) from Australia
Its financials look promising but competition in this sector is fierce.
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Will this software-as-a-service (SaaS) company struggle to gain traction amid the torrent of other software IPOs? The good news: Its balance sheet looks positive. But the software industry is highly competitive and there's no guarantee JFrog will continue to follow its upward trajectory.
Because JFrog's listing is on the NASDAQ, investing in the IPO itself is no easy feat from Australia. Only a few share trading platforms offer IPOs and these are typically Australian listings.
Unless you're registered with a full-service broker that offers US IPOs, your best bet is to buy shares in JFrog once it lists on the stock exchange.
What we know about the JFrog IPO
According to JFrog's S-1 filing with the U.S. Securities and Exchange Commission (SEC), it plans to go public on the Nasdaq Global Select Market under the ticker symbol "FROG." Approximately 11.6 million shares will be up for grabs, including 8 million shares from JFrog and 3.6 million shares from selling shareholders.
The suggested share price was $US39 to $US41 and the deal is being underwritten by Morgan Stanley, J.P. Morgan and BofA Securities. It listed on September 16 and closed the day at $US64.79.
Once JFrog's stock goes live, investors interested in purchasing shares must be ready with a brokerage account.
How to buy shares in JFrog when it goes public
Here's what to expect of the JFrog investment process:
- Compare share trading platforms. To buy shares in a US company from Australia you'll need to find a trading platform that offers access to US stock markets. If you're just starting out, look for a platform with low brokerage and foreign exchange fees.
- Open and fund your brokerage account. Complete an application with your personal and financial details, like your ID and tax file number. Fund your account with a bank transfer, credit card or debit card.
- Search for Tesla. Find the share by name or ticker symbol: TSLA. Research its history to confirm it's a solid investment against your financial goals.
- Purchase now or later. Buy today with a market order or use a limit order to delay your purchase until Tesla reaches your desired price. To spread out your risk, look into dollar-cost averaging, which smooths out buying at consistent intervals and amounts.
- Decide on how many to buy. At last close price of US$449.76, weigh your budget against a diversified portfolio that can minimise risk through the market's ups and downs. You may be able to buy a fractional share of Tesla, depending on your broker.
- Check in on your investment. Congratulations, you own a part of Tesla. Optimise your portfolio by tracking how your stock — and even the business — performs with an eye on the long term. You may be eligible for dividends and shareholder voting rights on directors and management that can affect your stock.
🧪How we chose these brokersFor our Top Picks, we compared our Finder partners using a proprietary algorithm in August 2020. Keep in mind that our top picks may not always be the best for you, and you're encouraged to compare for yourself to find one that works for you. Read our full methodology here to find out more.
What we know about JFrog's balance sheet
In 2018, JFrog raised a sizable $US165 million from private investors. TechCrunch reports that this Series D funding round resulted in a company valuation of $US1.2 billion.
So, how are its financials? JFrog states that 85% of its revenue comes from multi-product subscriptions and that it's experienced 50% year-over-year revenue growth for the six months ending June 30, 2020.
In 2018, the company reported a net loss of $US26 million on $US63.5 million in revenue. And in 2019, JFrog experienced a net loss of $US5.3 million on $US104.7 million in revenue.
JFrog isn't profitable — yet. But this is common in the SaaS sector where growth is prized over profit. And based on its financial reports, JFrog is increasing its revenue and decreasing its losses — exactly the type of promising trend investors like to see.
JFrog investment risks
JFrog isn't the only software company to announce its IPO this quarter. It enters the market amid a crowd of other software providers, including Unity, Asana, Snowflake and Sumo Logic. With the launch of so many IPOs in the SaaS industry, it may be difficult for JFrog to attract the attention of investors.
Speaking of which — the tech sector is renowned for its fast-paced nature and highly competitive environment. Another concern for investors to consider is whether JFrog has the staying power to edge out its competitors and turn a profit in the years to come. Growth is no indication of future profitability and JFrog is far from a risk-free investment.
JFrog is a software-as-a-service company that helps businesses deliver application updates. It was founded in 2009 and is headquartered in Sunnyvale, California. It boasts over 5,000 customers and millions of users worldwide.
In 2018, it earned the IDC Innovators Award, and in 2019, it was named one of the best 100 private cloud companies by Forbes. The company doesn't have a Better Business Bureau page or Trustpilot presence.
To buy stock, you'll need to open a brokerage account. Compare your options using the table to find the best fit.
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