• Jerremy Alexander Newsome

Our thoughts on the UPWK IPO

Hey rockstars of the retest!

What an amazing Sunday! Everyday we have the ability to make it the best day yet. So what are you doing today!? I wanted to write a quick article for you lovely people so that we can absorb new knowledge together. So let's not wait any moment longer. Today let's talk about the new IPO UpWork, ticker symbol UPWK :)

UpWork is a platform that connects freelancers, and independent professionals with businesses that needs their expertise. Founded in 1999 UpWork was originally called E-Lance / O Desk and was surprisingly ahead of its time. Originally it was founded as a technology for supporting virtual work but over the years has slowly morphed into the identity that it is today. In 2015, they rebranded and became UpWork. They are currently headquartered in Mountain View and San Fransisco, CA and have over 200 employees. 

It's funny, when I was in 6th grade I had a substitute teacher say that "The future will be filled with independent contractors. Everyone will work for themselves." And at the time I didn't even know what an independent contractor was. I still have no idea WHY this epiphany from some random 35 year old substitute teacher stuck in my brain, but boy was he seeing the future. This was around 2003 and the internet was still fairly new and people still mostly worked for other people. But I digress.

Right now UpWork has over 16 million Freelancers registered as users of their site. WOW. That is quite a staggering number with only the potential to increase over time. UpWork makes money 2 ways: from collecting fees from both the client and the freelancers themselves. In 2016, UpWork updated their pricing model to the following. 

Which is causing a bit of a stir as freelancers are now being charged a LARGER fee for smaller transactions. This model is dependent on your keeping your client for long term relationships which in theory is nice, however not such good news for freelancers hired for quick one off projects.

While UpWork was one of the first, it is certainly not the only of it's kind in an internet centric world. Freelance companies are popping up everywhere across the web as the demand and amount of independent contractors continues to increase. One of the other largest freelance companies on the internet is actually Fiverr, alt

hough I wouldn't consider these two direct competitors. Fiverr's draw is that it's gigs start at $5. So the projects you find on it are typically quick and simple tasks for the freelancer on it and aren't necessarily long term "projects". One of UpWork's main competitor is Freelancer.com which is similar in setup. I think the main factors going forward in the growth of these companies besides size is really going to be price set up. Obviously as a freelancers, you are solely dependent on yourself to generate your income. So it is only natural that you will gravitate towards companies that give you the opportunities for the most return on time spent. As of right now Freelancer.com's pricing structure (3% or $3, whichever is greater, per payment) is much leaner than UpWorks current structure. So I am curious and excited to see if the current king will stay on top.

UpWork IPO'ed at $15 a share, above where it was originally expected. Since it's open the stock has slowly fallen with much of the rest of the market. My current plan. Be patient. It is just a matter of time before this one bounces. The stock has too much potential in an ever growing economy of freelancers to go down forever. I am currently waiting to buy low and sell at an obvious resistance. Here is UPWK's current chart.  Right now, it's doing what a lot of new tech IPO's will do. Open and start sinking. Based on some recent candles and the gap up we had this week, one could begin to watch UPWK rise from here. 

The risk:reward is certainly small, but the odds are high. I love that gap up into a shaved top candle that occurred on Friday. If UPWK ever breaks that downward trend line, keep your eyes peeled for further continuation and growth! 

 According to Indeed, UpWork is the Number 16 Employer of Millenials. Which is honestly so cool as it's not even an actual company that employs, it just connects you to those who do! As the newer generations continue to join the work force I am excited to see what all of these incredible online freelance companies do! It's the future, traders! So don't fight it! Embrace it and make some money! Have an amazing day and if you have any future IPO's you would like me to look at just let me know at ashley@reallifetrading.com !

- Ashley

"Be kinder to yourself. And then let your kindness flood the world." - Pema Chodron