Knightscope Is a Risky but Promising Addition to Your Tech-IPO Portfolio

For all you know, they might be watching you right now. It’s true: the droids are out there and the cameras are on, as California-based autonomous robot security (ASR) company Knightscope (KSCP) is on a mission to…

deter, detect, report and save lives. It’s an investable company, as the initial public offering (IPO) of KSCP stock took place just recently.

While the stock is new to the Nasdaq exchange, Knightscope has actually been around for a while. It was founded in 2013 by William Li and Stacy Stephens, and Knightscope already has 80 to 90 ASRs under contract in the U.S.

Suffice it to say that KSCP has the typical IPO pop, as well as the all-too-common post-IPO drop. So, should risk-tolerant investors consider the stock now that the hype and disappointment phases have passed?

It depends on whether you’re willing to take a chance on a business that doesn’t yet have a profitable profile. Knightscope shares represent a pure play on the emerging ASR market, and while the company’s financials aren’t necessarily ideal, the broader market’s growth could eventually lift the share price.

A Closer Look at KSCP Stock

On Jan. 27, KSCP stock opened for trading on the Nasdaq at $14.44. The share price soon fell to $6, but then it soared during the next few days, peaking at $27.50 on Jan. 31.

If you’ve been watching IPO stocks over the past couple of years, you can probably figure out what happened next. When you see enough hype-and-flop stories unfold, IPOs can become all too predictable.

After topping out in late January, KSCP stock starting working its way back toward a more realistic price point. The stock fell below $10 on Feb. 3, and landed near $9 the next day.

Knightscope doesn’t pay a dividend, so the company’s investors will have to rely on stock-price appreciation in order to turn a profit. Still, if you’re ready to wager on the robot revolution with a small company that has big ambitions, Knightscope should be on your watch list.

The Robots Are Everywhere

Before we get to the unfortunate financial aspects of Knightscope, let’s learn more about the company and what makes it so promising.

Knightscope’s ASRs are able to independently go on security patrols, without the need for a pilot. While offering a physical presence that might deter criminal activity, the ASRs can also provide real-time data that may be useful to security teams.

Currently, Knightscope’s product lineup includes…

 

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