It's a solid business, sure, but look at the risk level of the investment and not just the business. The long-term stock market average is around 7% (and you can always invest there instead). A hot technology IPO like this is risky. What kind of a premium do you demand for taking this risk? You don't just buy a hot stock and expect its price to sit there; they have Treasury bonds for that.
How much growth do they need to pull off 7%+ return on your investment? Do you think that's realistic, given the competition and the amount they're spending on acquiring customers? Or have they already priced in most of that growth, leaving very little for you?
If you don't have a numerical answer for these questions, you're gambling, not investing.
How much growth do they need to pull off 7%+ return on your investment? Do you think that's realistic, given the competition and the amount they're spending on acquiring customers? Or have they already priced in most of that growth, leaving very little for you?
If you don't have a numerical answer for these questions, you're gambling, not investing.