Knightscope IPO: Learn About The Stock & How To Invest

KnightScope Robot in a Parking Lot

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What Is Knightscope?

Knightscope, Inc (NASDAQ:KSCP) was founded in Mountain View, California in 2013 to help large businesses and law enforcement agencies with their security needs. KSCP develops revolutionary Autonomous Security Robots, or ASRs. KSCP also provides its Knightscope Security Operations Center, or KSOC, a browser-based interface that allows clients to access real-time data.

In its ASR lineup, Knightscope offers three security robot products: the “K5” ASR for outdoor use, the “K3” ASR for indoor use, and the “K1” ASR for stationary use indoors or outdoors.

As of December 31, 2021, Knightscope had over 28,000 investors, including four major corporations, and has raised over $100 million. Access to capital markets through the IPO will provide the additional capital required for future growth.

When Is The Knightscope IPO Date?

The

initial public offering (IPO) for Knightscope, Inc (KSCP) was January 27, 2022. The opening price was initially set at $10 per share, with $40 million in shares made available in the offering. Post-IPO, Knightscope could be valued over $580 million.

Warning: Investors should use caution when thinking about investing in an IPO, or immediately post-IPO. This is primarily because there is less information made available about the issuing firm, compared to stocks with more history. Also, investors should keep in mind that many IPOs are heavily marketed and the earnings outlook for the stock can be overly optimistic and potential risks understated.

Knightscope IPO Details

Details about the KSCP IPO are:

  • IPO Projected Valuation: Up to $585
  • IPO Date: January 27, 2022
  • IPO Projected Price: $10
  • Exchange: Nasdaq
  • Ticker: KSCP

Note: IPO stocks often trade at a significantly different value than their official IPO price once trading begins in the secondary market. Investors considering the purchase of shares of a recent IPO may discover that the market price is nowhere near the initial IPO price.

7 Steps To Invest In KSCP Stock

Investors are able to buy shares of KSCP in the same way they may buy stocks of other publicly traded companies.

Note: This report is not a recommendation to purchase KSCP stock or any other security. For investors who are interested in pursuing a potential investment after the Knightscope IPO is complete, the following steps for buying stocks will be helpful.

1. Understand KSCP’s Financial History

Although there is not much public information available about Knightscope, investors should look at KSCP’s financial history on their form S-1 SEC filing. For the six months ending June 30, 2021, Knightscope generated revenues of $1.8 million. However, even as revenue growth has been solid, KSCP is posting losses, as is the case with many startups.

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2. Assess KSCP’s Financial Reports

For the six months ending June 30, 2021, Knightscope had $17.5 million in total assets and $24.4 million in total liabilities. In the first six months of 2021, Knightscope posted a net loss of $22.7 million, which is more than the $19.3 million in losses it had for the fiscal year 2020, which was a 60 percent increase over 2019.

The primary financial statements for review include the income statement, balance sheet, and the statement of cash flows. These financial statements can help investors learn about a company’s cash flow trends, capitalization structure and financial position.

3. Evaluate KSCP’s Potential Compared To Your Investment Horizon

When evaluating potential stocks to buy, investors should consider their time horizon and risk tolerance. For example, a swing-trader may be interested in short-term growth potential where a long-term investor would care more about strong financials than short-term price movements.

4. Select A Brokerage

Begin with the selection of a brokerage firm. The account types commonly used for trading stocks include a standard brokerage account and a retirement account like an IRA.

Investment trading accounts can be opened with a full-service broker, who may provide advice and portfolio management for a fee, or a discount brokerage company, where investors can manage their own portfolio for a reduced cost.

5. Choose An Investment Size And Strategy

Investors who have decided to buy shares of the stock will need to consider how many shares to purchase and what investment strategy to adopt for this position. The investment strategy will guide an investors’ holding period and exit strategy.

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Examples of basic investing strategies or approaches include short-term trading, swing trading, or a long-term holding period for KSCP stock. Most investors choose to buy and hold stocks for lengthy periods of time.

6. Choose An Order Type

Investors have many choices for placing orders to purchase stocks. The main order types include market orders, limit orders and stop orders.

  • Market order: The most common type of order made by retail traders, a market order is an order to execute a trade immediately at the best available transaction price.
  • Limit order: When an investor places a buy limit order, they specify a maximum price to be paid for the shares.
  • Stop order: This is an order to buy or sell a stock once it reaches a certain price, known as the stop price, which is higher than the current market price in the case of buy-stop, or lower than the current market price for sell stops. A buy-stop order could be used to enter a position in KSCP stock once it rises to the stop price. An investor would use a buy stop order if they want to be sure the stock is trending up before purchasing, even though the trade would occur at a higher price than the stock is currently trading.

7. Submit The Trade

After investors have funded their account with cash, and have decided an investment size and order type, then they can place the order. If the trade is a market order, it will be filled at the best available transaction price immediately.

However, if investors submit a limit order or stop order, the investor may have to wait until the stock reaches their target price or stop loss price for the trade to be completed.

Note: Limit orders are good for one trading day, unless otherwise noted as a ‘good-til-canceled’ order, or GTC, in which case the order would remain in place until completed, notwithstanding a certain expiry date.

Bottom Line

Investors considering an investment in KSCP stock after the Knightscope IPO should carefully consider the firm’s financial background, future growth potential, and the risks of buying shares. While Knightscope has seen steady growth in revenue, they’ve also seen an increase in losses.

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