Forecasts predict that by the end of 2021, the global video game market sector will haul in $138 billion. No longer a niche segment for the chronically friendless, video games now command serious social cachet. But this market is incredibly competitive, which is what makes the Fractal alluring.
Specializing in highly functional computer cases and air- and water-based cooling equipment, Fractal supports gamers by keeping their equipment running in tip-top shape, even under intense usage.
Fractal Financial History
One of the small-cap companies in the video game arena, Fractal has demonstrated strong potential, particularly due to the COVID-19 pandemic. For example, between 2019 and 2018, revenue increased nearly 14% to $42.8 million. But from 2019 to 2020, Fractal enjoyed a sizable leap in sales to $69.4 million, up 62% year-over-year.
This demonstrates not only the resilience of the global video game market, the pandemic effectively handed Fractal a free marketing opportunity. With the crisis forcing millions of workers to operate remotely, government-mandated shutdowns incentivized video game sales as other entertainment options suddenly became inaccessible.
Even though coronavirus infections are largely declining in developed countries, the process to normalization may take time. This gives video game-related companies an extended pathway of pandemic-related bullishness, auguring well for a potential Fractal IPO.
Fractal Potential
Should Fractal make its public debut in the main U.S. market, it would offer investors an intriguing angle in the viable but overcrowded video game sector. While the industry has no shortage of excitement, wagering on direct plays is risky. Primarily, success or failure depends on sometimes whimsical consumer behaviors.
With Fractal stock, you’re banking on cooling equipment, something that every hardcore PC gamer needs to keep their gaming rig operating smoothly, even under intense operational demand. Further, Fractal’s advanced liquid-cooling systems provide unparalleled heat dissipation, benefitting both operational resiliency and long-term reliability.
Given how expensive gaming-centric computers are, Fractal’s target consumers will likely view its products as investments, not expenses. This could have a hugely positive impact on Fractal stock over the years ahead.
How to Buy Fractal (FRACTL) Stock
Should Fractal “graduate” to the main market via a traditional IPO process, most retail investors must wait until the opening day when shares are available to the general public.
Unfortunately, this puts you at a disadvantage since you must buy Fractal stock at the market price as opposed to the initial offering price, which is often much lower. However, to be able to purchase such highly desired offerings, you must be a well-heeled and well-connected investor.
Usually, IPO underwriters input a discount relative to what they forecast as the price the market will bear for the target offering. This rewards institutional investors for taking a gamble on the stock. But to be in this position, you must be willing to participate in all IPOs delivered to your doorstep — the good, bad and ugly.
Being a retail investor, therefore, and buying with the public on IPO day isn’t without its advantages. In this case, you can be picky about where you put your money.
Step-by-step Guide:
- Pick a brokerage.
Before you can participate in any public offerings, you must first select a brokerage. Thanks to the cost savings from advancing technologies along with strong competition, you have many viable options. Also, brokerages today advertise similar incentives, such as commission-free trading and trading educational material.
More than likely your decision will come down to preference and anticipated usage. For instance, if you have a busy schedule, you may want to search for mobile trading apps, which offer maximum convenience. On the other end, if you see yourself trading regularly, you should look at more robust platforms. - Decide how many shares you want.
Deciding how many shares of the potential Fractal IPO to purchase comes down to multiple variables like penchant for risk, anticipated time in the market and budget size.
Once you have a dollar amount you want to spend, take this figure and divide it by the market price of the stock. Whatever is the whole number is the number of shares you can purchase.
Please note that some brokerages offer fractional share ownership. If this is an important factor, include it in your list of must-haves for best brokers. - Choose your order type.
Unlike other market environments, the equities sector features constant fluctuations in asset value. To adjust for this, investors must select which order type best suits their tactical needs. Additionally, you’ll want to note some important concepts.
• Bid: The bid is the highest price a buyer will pay for a stock. It is always lower than the ask.
• Ask: On the other end, the ask is the lowest price that a seller will take. It is always higher than the bid.
• Spread: The difference between the bid and ask prices is the spread and it’s important for two reasons. First, the spread represents the profitability margin for market makers, who incur some risk when they acquire shares for the purpose of distribution to buyers (investors). Second, the spread is a real-time indicator of market liquidity, with narrower spreads signaling high liquidity while wider spreads warn about lower liquidity.
• Limit order: If you want maximum transparency over the terms of your market transactions, use limit orders to buy and sell your stocks. Such orders only execute at your predetermined price. Note that no guarantee exists that your target stock will reach your specified price, potentially leaving your limit order hanging unfulfilled.
• Market order: If you need assurances of order fulfillment — like the session is about to close — select a market order. This guarantees fulfillment at the next available price. However, the transaction will occur at rates least favorable to you (i.e., buy orders on the ask, sell orders on the bid).
• Stop-loss order: A safety valve for your portfolio, a stop-loss order is basically a market order in reverse, automatically exiting you out of a particular position at either a predetermined price or the next available price, whichever comes first. While this affords a measure of confidence, in a gap-down session where the market opens at a much lower price than the previous session’s close, you risk exiting at a far lower price than you may have anticipated.
• Stop-limit order: A stop-limit order takes the same concept of automated safety but with a twist: it only executes at a predetermined price. Essentially, stop-limit orders are limit orders in reverse and they come with the same risks. (Your target stock may never reach the predetermined price — your stop-limit order would be useless.) - Execute your trade.
Once you’ve decided to move ahead with your target stock, follow these steps for a market order.
• Select action type (buy or sell).
• Enter the shares you want to acquire (or sell).
• Make the request.
Limit orders are identical to market orders with the exception that you will also enter your execution price request. Again, keep in mind you have no guarantees that your stock will reach your price so it pays to keep your expectations realistic.
Deciding which order type to use depends on your personal demand and also market conditions. If the stock is moving wildly and you truly believe in the opportunity, go with a market order.
On the flip side, if you want to know ahead of time what price your order will execute, a limit order is your best bet. This particular approach is also beneficial if you’re dealing with a stock with a widespread since market orders will automatically fulfill buy requests at the higher ask price.
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An Indirect but Compelling take on Gaming
With video games and esports increasing subsegments integrating into mainstream culture, millions of investors have put their money into direct sector plays, whether console manufacturers or gaming publishers. However, the Fractal IPO gives you a different take — betting on the cooling equipment that keeps highly tuned gaming-centric computers running properly for many years.
This indirect approach may offer more reliable profitability. That’s because consumer preferences often dictate the success of individual video games. But every hardcore gamer needs cooling equipment, making Fractal indelibly relevant.
About Joshua Enomoto
His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.