Should Investors Set Money Aside for Pending IPOs?

In this clip from "The Future of Fintech" on Motley Fool Live, recorded on Feb. 10, Motley Fool contributors Matt Frankel, Jason Hall, and Will Healy discuss their IPO approaches and the factors they weigh when deciding to either invest early or wait one year to evaluate the business's financials and management's performance.

Matt Frankel: In viewing [Block, Inc.] Square (NYSE: SQ) and its ecosystem, do you ever consider a peer comparison with Adyen (OTC: ADYE.Y) or Stripe? Stripe is also considering a 2022 IPO debut, and is this a factor at all in your investing among the three?" There's a lot to unpack there. For those who don't know, Adyen is a payment processor that primarily focuses on larger companies. I don't view them as a direct competitor to Square in that sense. They're starting to creep into the small and medium-sized business space but not very much, and even mid-sized businesses make up less than 2% of their payment volume. Their customers are like Microsoft (NASDAQ: MSFT) and Etsy (NASDAQ: ETSY), and they were the one that stole eBay's (NASDAQ: EBAY) account away from PayPal (NASDAQ: PYPL) as their primary payment processor. I don't set money aside because I think a company is going to go public like Stripe. I don't know about you guys, but I don't set money aside for pending IPOs. I would have to see what their valuation is going to be and what their business looks like because right now we don't know what their growth numbers look like. It could be a terrible investment for all I know. But I don't know, guys, what do you think about the three as investment opportunities and do you allocate less money to one in anticipation of maybe buying into some of the others. What do you think about it?

Source Fool.com