I guess it doesn’t take much to get the market back in the mood for IPOs – after worse-than-expected CPI data last Friday, the market tanked as expected. But over the weekend, it seems that traders decided it either wasn’t that bad, it was already priced in, perhaps we’d at least gotten closer to the bottom, or perhaps just “screw it – buy more stocks”… and Monday saw a strong rebound rally that carried into Tuesday. And so now we MIGHT have conditions conducive to a few IPOs!

We even have a mainstream IPO coming onto the calendar this week, albeit a biotech, and the low-float IPOs are all faces that we’ve become perhaps a bit too familiar with due to their persistent attempts to debut despite repeated failures to fill their order books. I’m not sure that a less tepid market makes these offerings any more appealing, and I don’t have any reason to believe that all of a sudden there will be high demand for these debuts from day traders. With the NASDAQ scrutinizing every issue that comes to market, it will be surprising if any of these are able to pull off the kind of shenanigans that have ensured a significant pop off the debut in some of these setups, and I don’t see anything resembling the kind of hype that has sent these setups on substantial post-debut rallies in recent years (and nothing even close to what we saw after HKD re-configured day traders’ perceptions of what was possible).

I’ll be mostly watching this week’s debuts from the sidelines – partially due to a planned family vacation, but also simply because we haven’t seen an IPO deliver a strong debut trade since NASDAQ reigned in the IPO train.

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This Week’s IPOs:

• Alopexx (ALPX) – October 20, 2022 | 3M Shares
  

• Prime Medicine (PRME) – October 20, 2022 | 8.9M Shares
  

• Beamr Imaging (BMR) – October 21, 2022 | 3M Shares
  

• Intensity Therapeutics (INTS) – October 21, 2022 | 2.22M Shares

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Ok, Let’s jump in:

Lockup Period Expiration (LPX) Watch:

Most IPOs are subject to either 90 or 180 day lockup periods before insiders and shareholders who owned shares of a company prior to the IPO can sell their positions. Typically, the dilutionary effect of this event will cause a stock price to drop, as supply increases without any fundamental changes in the value of the underlying company. Many investors will wait for LPX before starting a long term position in a company.
Conversely, with low-float IPOs, we often see press releases and other announcements dropped going into, or slightly following LPX, presumably as insiders attempt to drive up the share price before they are able to exercise their warrants and sell their shares.

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Well, after LASE basically crapped the bed in it’s rather well-structured IPO last week, it seems that we have no IPOs on the calendar this week. Though we’d hoped for ALPX to debut (I mean, perhaps “hope” isn’t really applicable since there was nothing particularly enticing about that offering), it appears to have been pushed due to lack of interest from investors.

So… for the time being, I’m looking at some Lockup Expiration setups for Chinese Stealth deals that were done about 5 months ago with LPX dates coming at the end of the month, and scalping some day trades here and there on early pre-market headlines.

These setups and more are continuously discussed everyday in our active trading community in the IPOWarriors Discord Channel
Live IPO trading and commentary on upcoming IPOs will be reserved for Premium Members within the #premium-members-room, but currently, there is a plethora of winning call-outs being made on a daily basis by regular contributors to the group (which includes some highly followed and well-known Twitter accounts with expertise in chart reading, SPACs, options trading, and more).

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This Week’s IPOs:

• Nothin’

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Lockup Period Expiration (LPX) Watch:

Most IPOs are subject to either 90 or 180 day lockup periods before insiders and shareholders who owned shares of a company prior to the IPO can sell their positions. Typically, the dilutionary effect of this event will cause a stock price to drop, as supply increases without any fundamental changes in the value of the underlying company. Many investors will wait for LPX before starting a long term position in a company.
Conversely, with low-float IPOs, we often see press releases and other announcements dropped going into, or slightly following LPX, presumably as insiders attempt to drive up the share price before they are able to exercise their warrants and sell their shares.

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Here are the LPX setups I’m watching to potentially patiently build positions.Most of these are previous Chinese Stealth IPOs sitting at relatively low prices. The risk here is that they are duds and don’t make any kind of run into LPX. Those at the $2.00 mark can relatively easily drop down to the $0.80 level, but we’ve also seen them run as high as $20+ (HUDI SOPA). The bigger risk is that they simply take too long to pan out and you end up watching them bleed out – once we get about 2 weeks past the LPX, you gotta manage your downside with stop-losses: ideally above entry, which is why I start patiently bottom-feeding on these a few weeks ahead of LPX.
We also see these sometimes take much longer than expected; see BEAT, which finally ran this past week or so: there were a lot of long-term bag-holders in that one that finally got an out – and holding past the initial pop-day is not as easy as it sounds.

Another approach is to simply be aware of these as potential LPX movers, and if you see one of them pop up on a pre-market scanner, check to see if there’s a news headline: even a fluffy PR drop can get these moving pretty hard.

I decided to delay sending out this week’s newsletter until there was something definitive to report regarding the IPO debut calendar. As most of you know, there has been a bit of a moratorium placed on fresh IPO debuts by NASDAQ as they attempt to sort out the root cause of the extreme pop-and-drop movements we’ve been seeing in recent IPOs, particularly the Chinese variety of F-1 filings that have made relatively ridiculous runs from single to triple, even quadruple digits in single trading sessions. The aim appears to be implementing new rules to curb this kind of volatility, or possibly to ensure that shareholders are not trading shares back and forth between their own accounts to either manipulate prices or launder money.

Meanwhile, a rather obscure IPO (AMV) managed to squeak through the cracks on Tuesday under Regulation A and Regulation CF crowdfunding offerings (so, no underwriters and no recent S-1 filing). We were on top of it and covering the debut in the Premium Discord channel: a few of us hopped in on the debut and caught a monster run from an opening trade of $30 that ripped as high as $300.00 in after hours trading (I was already out for the day when it finally debuted). This one didn’t appear to be any kind of Stealth setup – simply a case of mishandled processing where the majority of shareholders were unable to sell their IPO shares on the debut: so basically a massive logistical oversight by the company, while NASDAQ appears to have been more focused on scrutinizing Chinese debuts. Oh well, clearly the IPO process is not as orderly as we might expect it to be, and not the first time an IPO has been mishandled on its debut (remember GCT? Wasn’t even supported for trading on WeBull after having handed out allocations through WeBull’s IPO Center requests!).

On the bright side, it appears that we DO have at least one confirmed, standard IPO this week, and I’m excited to review it.

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This Week’s IPOs:

• Laser Photonics (LASE) – September 30, 2022 | 3M Shares

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Ok, Let’s jump in:

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We have finally reached a point in the year where bulge bracket banks have decided to bring some mainstream IPOs to market: which is a good sign of at least a temporary reprieve in the ongoing slump that has beaten down the market since the start of the year, but far from a sign that there aren’t further down-slides ahead. Regarding the maintream IPOs on the calendar for this week, we tend to see the ‘first-out-of-the-gate’ mainstream IPOs to be priced at a level where there is minimal downside risk to institutional investors, and the pressure for underwriters to avoid a significant drop off the debut is relatively high. I interpret this as reduced risk, but am not necessarily convinced that retail traders are particularly excited about mainstream deals coming to the table right now, as there is far more interest in the low-float names on the calendar this week.

I believe that we may have reached an inflection point in the low-float IPO market with last week’s relatively tame debut of YOSH, and will be approaching this week’s lineup with a bit more caution, both in terms of the allocation requests I placed, and how I am approaching the debut setups of each IPO. I feel that we may have reached a point in the hype cycle around these names where retail has gotten a bit over-heated and ahead of itself, with front-run positions being overloaded while ignoring fundamental risks in the structure of the deals – let alone, no consideration for where the shares are being allocated or any ‘color’ on the deals from sources closer to the books.

We are also seeing what may be SEC scrutiny on some of the Chinese/Stealth IPOs, causing delays in debut that could be a portent of the end of the current run of insanely priced debut premiums that combined untempered hype with shady float manipulations. It would be an unfortunate end to a highly lucrative trade setup, though it does seem that the manipulators of these schemes will find ways to work around any regulatory scrutiny one way or another, and we’ll be on the lookout for these opportunities.

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This Week’s IPOs:

• Wearable Devices (WLDS) – September 13, 2022 | 3.6M Units
  

• Know Labs (KNW) – September 14, 2022 | 3M Shares (uplisting*)
  

• Jupiter Neurosciences (JUNS) – September 15, 2022 | 2.5M Shares
  

• Corebridge Financial (CRBG) – September 15, 2022 | 80M Shares
  

• Third Harmonic (THRD) – September 15, 2022 | 9M Shares
  

• Lichen China (LICN) – September 16, 2022 | 6.25M Shares
  

* Generally I don’t cover OTC uplistings unless I see something particularly compelling about them, which is why I’m not reviewing LNKB this week. Perhaps it runs, it’s lowish float (4.6M shares) but I understand far less about these setups and even less about bancorps, so gonna let this one pass.

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Ok, Let’s jump in:

Lockup Period Expiration (LPX) Watch:

Most IPOs are subject to either 90 or 180 day lockup periods before insiders and shareholders who owned shares of a company prior to the IPO can sell their positions. Typically, the dilutionary effect of this event will cause a stock price to drop, as supply increases without any fundamental changes in the value of the underlying company. Many investors will wait for LPX before starting a long term position in a company.
Conversely, with low-float IPOs, we often see press releases and other announcements dropped going into, or slightly following LPX, presumably as insiders attempt to drive up the share price before they are able to exercise their warrants and sell their shares.

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