JOIN THE LIST, GET THE IPO TRADING GUIDE

Low Float IPOs for Tomorrow (9/15/2021) …

Low Float IPOs for Tomorrow (9/15/2021) …

September 14th, 2021

We’ve got a full slate of at least 7 IPOs tomorrow, but there are 3 I’ll be especially watching for low-float plays, including one that was not on the calendar at the start of the week. Let’s jump in!

EzFill (EZFL) – 6.25M shares
This one is weird: almost comical in the business model (an app for delivering gas), but it’s been getting some buzz on Twitter, and the low float could be enough for it to get pumped by trading groups. We’ll have to see what kind of retail allocations traders report tomorrow morning, and if we do see any premium in the debut price, I would expect it to get dumped. This might run, but I might have to miss it: have other trades I’d rather be stuck in if needed. The price range is expected to be about $4.00 any lower and maybe worth a chance, above that, I dunno. I have an odd feeling that this one is weird enough to attract some attention for a day and push it up a point or two, but kinda shaking my head at the prospect of this one running, and may just have to watch and laugh from the sidelines if it does run.

Pasithea Therapeutics (KTTA) – 2.9M shares
This one was rescheduled from about a month ago: a biotech that is repurposing ketamine for therapeutic use, with a seriously low float that could make this one primed for some attention from social traders. If there’s no volume, this one will get stuck, so I’ll be watching to see if we get a debut below the IPO price, and if we do get a drop off the open, consider starting a position. The price range is set at $5.00-$7.00 : below $5 this could be fun: above $7 could be dangerous.

PROCEPT BioRobotics (PRCT) – 5.5M shares
This one is a little different than the others, as it is backed by some more traditional underwriters including BofA and Goldman Sachs. They have developed a surgical robotics device for male urology treatments: with comparisons to Intuitive Surgical that could give this a substantial boost. The price range is also a more respectable $22-24, so it could debut at around $30… I’m hoping the market conditions inhibit too high of a debut premium, as this one can move without social media buzz: as I feel it will get institutional interest as well. Given the low float and solid business model, I have more conviction in this trade than the others on this list.

These aren’t the only IPOs for tomorrow: we’ve got $ONON $DH $BROS and $TWKS … all potential distractions to each other. Can’t trade them all, but will try to pick the winners and be prepared to adjust strategies where I see opportunities.

I’ll be in the Reddit thread all day to live trade these:
Join me here

NOTE: This is not financial advice, I am not a financial advisor: just sharing ideas and this is meant for informational purposes only. I am likely to take positions in the securities mentioned in this publication within the next 72 hours. Trade smart!

Recent Posts

Continue reading

Low Float Sneaker IPO on watch for tomorrow… maybe…

Low Float Sneaker IPO on watch for tomorrow… maybe…

August 26th, 2021

Ok, so first, let me apologize for not sending out an alert on RNXT yesterday – the IPO was today, and it wasn’t worth playing in my opinion. While it was a low-float play with just 1.8M shares, it’s a biotech and the only opportunity turned out to be waiting for the open and subsequent drop, and be patient for an opportunity to buy at an extreme dip, then wait and hope for a rebound trade. Wouldn’t want to be stuck in it, and didn’t play it myself. Maximum play would have been to get in at $6.66 and out at $7.97, and timing those would have been pretty challenging and the conviction would have been pretty low. Better leave it be.

Tomorrow there’s another low-float IPO that just came up out of nowhere… it’s for a company in the genomic sequencing field, which is a pretty hot industry full of large competitors. They make DNA and RNA sequencing machines that have been used at Harvard and other research institutions largely used for cancer research.

I’m talking about SeqLL … and the ticker is slated as SQL.

The company originally attempted to IPO in April 2021, with the goal of boosting marketing – but I couldn’t find much else on why they withdrew. In fact, there’s not much information about the company available on the Internet, and even less about their IPO.

In their initial S-1 filing, they claimed revenues of $779k in 2018 down to $257k in the first half of 2019.

Also notable is that this IPO is showing as still available for order on ClickIPO, and is not appearing on any of the primary IPO calendars (it was brought to my attention from one of the members of the IPOWarrior Reddit thread.

I’m a little skeptical that this IPO will actually debut tomorrow, and without any public promotion of their debut, wouldn’t really expect it to fly off the debut. While gene-editing in general has been pretty hot, companies like DNAY have not done well from their IPOs, though I guess that’s more like sythetic biotech.

The only thing particularly interesting about this play is that the float is listed at just 2.3M shares, and the underwriter is Maxim Group, LLC – whose IPOs have not necessarily done incredibly well off the debut, but some (including RGC last week), have made some suspiciously aggressive moves in the weeks or even months following their debuts.

I doubt I’ll be playing this one off the debut – but will keep an eye on it and wait to see if any trading groups start bringing volume into this one on any sort of bottom.

Note: I am not a financial advisor and this is not trading or financial advice. I may take a position in the securities mentioned in this article within the next 72 hours. This is all just for informational purposes – trading in the stock market is risky. Good luck.

Recent Posts

Continue reading

Low Float Vs. Stealth … Two IPOs to watch this week!

Low Float Vs. Stealth … Two IPOs to watch this week!

July 7th, 2021

One is most likely just a low-float play, the other, has the marks of a Stealth IPO.

Ok, so over the past few weeks we’ve had a number of blockbuster IPOs – some have done well (DNUT, DOCS, even S in the last two days) ; while others have been busts (looking at you DIDI)… for the most part, we’ve done pretty well on picking the winning mainstream plays and avoiding the losers.

But the wins on these trades have been nothing compared to the win opportunities given on the low-float and ‘Stealth IPO’ trades: BON, VRAR, and of course, CPOP: all provided massive upside potential.

So why do these Low-Float trades often open into immediate upward halts, and what makes a ‘Stealth IPO’ different than a just a small IPO with a low number of shares?

The Low Float IPO:
While IPOs are generally seen as a way for a substantially developed private startup to take the big leap into the world of publicly capitalized finance, we often see instances of smaller companies looking to raise relatively smaller amounts of capital for a relatively diminutive valuation. Perhaps it is to raise capital, or to provide liquidity for investors, founders, and early employees.

While there are rules that govern the minimum share price ($4 for the NASDAQ) and number of shares offered (1.25M also NASDAQ), as long as the company fulfills these along with other filing requirements, they can go public.

Historically, most low-float IPOs debuted with little notice and little trading volume, but recently – thanks to a growing interest by retail traders in meme/hyped stocks, and social media personalities {ah-hem} putting a spotlight on these trades, we’ve seen interest in low-float IPOs provide instant demand that results in immediate spikes up in the share price of these stocks once they debut.

In most cases, the upward momentum is rather short lived: a couple of upward halts, followed by a rapid townturn, and a fade-out back to the original IPO price and the stock gets forgotten about until perhaps it posts some meaningful headlines in the future (and then it’s GAME-ON again… ALF !)

In some cases, we’ll see the low-float debut run sustain a full day run: with a run-up at the end of Day 1, and perhaps a spike in Day 2, but this depends largely on whether social media buzz catches on and this depends largely on whether there is any ‘story’ behind the stock that makes in seem interesting for a potential long term hold (VRAR last week was a good example of this).

The ‘Stealth IPO’, and why it’s a different animal:
On the surface, the Stealth IPO looks very similar to the low-float IPO, in that, it’s some random business model that is raising a small amount of money with a low float. But there appears to be something very fishy going on with these plays that result in IPO debuts that have jumped 500-1000% or more over several days; indicating that this isn’t simply the workings normal market conditions.
Something is clearly going on here, and while I care less about the potentially nefarious motivations of the company or its underwriters, I do aim to uncover these opportunities prior to their debuts and to profit from their explosive runs.

I have two hypothesis for what mechanisms are driving these Stealth IPOs, and perhaps they are some combination of both (or perhaps I’m way off), but we do tend to see these truly stratospheric runs have a number of traits in common:

  1. They are typically announced mid-week, with little to no publicity, and appear to be intentionally hiding their IPO from public announcement.

  2. They are almost exclusively held by companies whose operations are in China.

  3. The underwriters are often amongst a small handful of financial firms that appear to be at least loosely, if not directly affiliated. Namely, Boustead Securities, Sutter Securities, and Network 1 Financial.

Hypothesis #1: These are simply ‘Rug Pull’ operations where the company (or underwriter, or affiliated 3rd party) buys and withholds a significant majority of the the IPO float from the market. With only a tiny number of shares being sold, a partnered counter-party can simply buy the shares at an elevated price to ‘ladder-trade’ the stock into an immediate halt. This could be done with very little money, since once the stock hits a 10% gain within 5 minutes or less, it will automatically trigger a circuit-breaker on most public markets. Conceivably, you could sell 1 share at a 10% premium and trigger such a halt. Once a halt occurs, it will appear on various services that announce such halts, and retail day-traders will take notice, and join in on the feeding frenzy. By withholding shares, the group driving the show can induce a series of halts up to a higher price, at which point, they can begin liquidating blocks of shares at an inflated price, causing the stock to immediately crash… then they pause their dumping, and allow the stock price to stabilize. On Day 2, they get back to work, usually in the early pre-market trading hours, when small volumes and no halts allow them to drive the price up to insane levels… at this point, buzz has reaches a self-sustaining level, and the drivers can continue to sell off their shares over several days, or weeks, until they drive the share price back to a ‘normal’ level more indicative of the underlying value of the stock.

Ok, so Hypothesis #1 is a very likely scenario regardless of whether we believe the next hypothesis has any merrit:

Hypothesis #2: These companies are simply posing as fronts for wealthy Chinese business people to transfer their money out of China and into America via inflated share prices: they would actually be the ones buying the shares (from their partner counter-parties) at inflated prices, in order to bring the losses onto their Chinese accounts, and pass those profits onto the selling side of those trades within their US based accounts. We saw what appeared to be a specific example of this in JZXN, where the IPO price was set at $5, yet the stock debuted at a ridiculous $45 and essentially bombed from there. Whomever ‘paid’ $45 for a $5 stock before it even started trading was either completely stupid, or was trying to ‘lose’ money.
Maybe I’m way off, but when there’s no other way to justify a phenomenon, finding explanations requires some creative thinking.

ANYWAY…

Let’s look at the two IPOs that appear to fall into these categories for this week:

First, the Low-Float IPO:
Ok, so this one has been on the calendar since last week, and fits the bill of a low-float IPO with a float of just 2.3M shares. However, it’s an American company, with a listing on AMEX rather than NASDAQ, and the IPO price is just $3, so this one is a slight deviation from the normal antics of Boustead Securities. Some of the Boustead offerings have turned out to be duds, and I’m a little bit skeptical about this one. If we don’t get an immediate halt upwards, I’ll be jumping out of this potential dumpster-fire as soon as possible, and even that might be too late to avoid a loss.
The company is Moving iMage Technologies (MITQ) and is slated to debut on July 8, 2021 (tomorrow… er, today: depending on when you’re reading this).

Now, for the ‘Stealth IPO’:
Here we go: this one’s got all the markings of a typical Stealth IPO: no promotion, not on most IPO Calendars except where mandated: NASDAQ finally listed it today. It’s a Chinese financial services company specializing in loan repayment and collection management. Given that China doesn’t really have a nationwide credit score, and collecting on loans can be nearly impossible, the official company description reads like some kind of gangster-for-hire employed by loan sharks, or bounty hunters at best:

”our unique approach that integrates internal and external resources under a centralized management system allows us to offer our customers a cost-effective and trustworthy solution to recover consumer loans.”

Ok, so moving past the hilariously worded description of their company, the underwriter for this IPO is none other than Network 1 Financial: the same company who brought us CPOP last week, and many other high flying, low-float IPOs in the past.

Anyway, the name of this company is Sentage Holding, and the ticker you’re looking for is (SNTG) – it debuts on Friday, July 9, 2021 and the float is expected to be 4M shares.

I can’t guarantee that this one will perform as well as the other Stealth IPOs, but I’ll be watching the pre-debut indication price, and if we see numbers in the $8-12 range, or slightly higher, I’ll be loading up a limit order and expecting a few halts out of the gate. If we get a ridiculous pre-debut indication above say, $20, I’ll probably have to bail, but the $45 debut price is the outlier, not the norm.

How to play these:

The strategy for playing these IPOs is relatively the same in terms of entering your position. You watch the indication price before the stock debuts, and enter a Limit Order ABOVE the indication price BEORE the stock starts trading. This will ensure you’re order gets filled at the moment the stock goes live.

In most cases, we see an immediate halt: the majority of the time this halt is upwards (good), occasionally it is downward (obviously bad, but rare). Once we get a halt (hopefully upward), you’ll have usually 10 minutes to get your game plan together, and this is where my strategies generally diverge between purely low-float plays and Stealth IPO trades.

For Low-Float plays: you’re gonna want to start taking out profits out of the opening of the first halt. I recommend selling out of 50% of your position at whatever price the stock opens trading from the halt: set a Limit order well below the halt price (doesn’t really matter, just anything low enough to ensure it gets triggered even if the stock opens lower than the halt price). I have access to ‘Level 2’ data in WeBull, that gives me some idea as to how much demand there is at what price levels during the halt. If I see a lot of buy orders above the halt price, I have reason to believe the price will continue upwards, at least out of the halt, and will use a calculation that works something like: ‘halt price + 10%’ and set a second limit order there. I may not sell out of 100% of my position, but at that point, I want to be about 80% out, and may let 20% ride to an end-of-day run or even into the opening of Day 2, but for a typical low-float play, I am more likely to just take all profits out of the first halt and call it a win.

For Stealth IPOs, the Level 2 data usually gives a pretty strong indication that we’re going to continue seeing upward halts beyond the first and second halt. Still I’ll start taking some profits off the table after the second halt, and will be ready to execute a Market or low-balled Limit Order as soon as I see the stock waiver at all from it’s upward trajectory.

A key difference in my strategy between Stealth and simply low-float IPOs, is that I’m more likely to let a Stealth IPO run through more initial halts, and will keep 10-20% of my trade alive for a Day 2 run or even longer, though it is very hard to predict this, and easy to feel stupid when big wins dissolve in the matter of minutes into break-even positions, or even small losses. The point is to give yourself a chance at the big money that comes on a play like CPOP last week, which debuted at $11.75 and ran up as high as $78 on Day 2.

If you want to join me for live-trading these IPOs, come to the IPO Warriors Reddit Thread on the day of each IPO.

And if you’d like to show some appreciation for the time, effort, and research I’ve done in sharing this information with you, please consider a contribution to my whiskey fund here:

https://www.buymeacoffee.com/hammondish

NOTE: I am not a financial advisor, and this is not financial advice. This is for informational purposes only… Trading IPO debuts is risky, you could lose money, you could make a lot of money, or you could just about break-even. Don’t trade with more than you’re willing to lose, and take responsibility for your own trades. Good luck out there.

Continue reading

Another Ultra Low-Float IPO on Stealth Watch…

Another Ultra Low-Float IPO on Stealth Watch…

July 1st, 2021

After taking solid profits on BON and a monster win on CPOP yesterday… I’ve got my sights set on another low-float play in the Virtual Reality/Augmented Reality space with an ultra-low float of just 1.75M shares.

Not gonna drag this one out, but keep an eye on VRAR today.

Remember, the quick profit play here is to expect an immediate halt or two (possibly more) and TAKE PROFITS with a Limit Order coming out of the open of each upward halt. Sell out in portions if you want to let some run, but be ready to exit with a market order once the fast upward movement hesitates.

Of note, this ticker is experiencing some technical issues on WeBull this morning, which could delay the run on this and make it unplayable for those with a WeBull account.

Anyway, it’s risky, but I like it for a run.

NOTE: This is not financial advice, I’m not a financial adviser, and this is meant as informational information only. Good luck!

Continue reading

Stealth IPO Alert – June 30, 2021

Stealth IPO Alert – June 30, 2021

June 30th, 2021

Stealth IPOs are risky debuts that are typically introduced without much promotion and are announced just prior to their debut. We’ve seen debuts like WNW, UTME, TIRX, and rocket off their debuts, while others like JZXN fall straight from $45 to $17.

The key to playing these debuts is to avoid insane debut premiums, and EXPECT an upward halt out of the open. While a debut premium of 100-200% may seem extreme for most IPOs, its’s somewhat expected for Stealth IPOs, but if we see a debut premium of 500% or more, whatever scam is behind these pumps has likely already been baked in, and the stock is not going to offer much upside. Still, even a highly pumped debut premium like JZXN offered a brief window for quick hands to exit their position for a small win. Again, if the stock does not immediately halt upwards, you need to get out…

Ok, so now for the background on tomorrow’s Stealth Watch IPO…

The stock I have identified as a potential stealth launch, is a Chinese entertainment company that promotes hip-hop through events both online and in live venues. In fact, this probably doesn’t really matter as much as the fact that this company’s IPO is underwritten by Network 1 Financial – the same company that brought us TIRX, AUVI, and others like last week’s ACXP… which didn’t halt but gave a nice day-long win as it ran from $5.95 to over $8.00.

Furthermore, this relatively unknown company did $19M in revenue in 2019 with $3M in profit, and even during the 2020 pandemic did $15.6M in revenue and $2.6M profit. With a relatively low float of just 6M shares, this one is primed to ‘pop’ off the debut, so keep an eye out for Pop Culture Group (CPOP) tomorrow morning – I expect it will debut rather early, as we have a full slate of IPOs including some blockbuster names that will take longer to pair trades.

Anyway… Good luck out there.

NOTE: This is not financial advice and I am not a financial advisor. I do intend to take a position in this security within the next 72 hours, and reserve the right to change my mind at any time. This is for informational purposes only – trade your own trade, and good luck!

Continue reading

Suspicious IPO Setup on Watch – May 27, 2021

Suspicious IPO Setup on Watch – May 27, 2021

May 27th, 2021

I’ve just uncovered an IPO that has been filed but not yet priced, and no date has been announced for the debut. So we don’t know for sure if this is going to attempt to go live in ‘Stealth Mode’, but it has me excited, and I’ll be tracking this one for a possibly explosive debut.

Let’s first check out why this stock has raised my suspicion:

  • It’s a Chinese Company. What do they do? Education, but that’s not really the point. We’ve seen recent Chinese IPOs for Janitorial and Appliance services jump 900% (EJH), and others that are OEMs for cell phone manufacturing jump nearly 1000% (UTEM)… as well as an insurance company that went from $17 to $50 in a single halt (TIRX)…

  • Low float. The float on this one is 5M shares, which is consistent with many of these low-float stealth IPOs.

  • Priced at $4-5 per share. Also consistent with the stealth IPO profile.

  • Now, this one’s really important: The underwriter is Network 1 Financial Securities… the same company that provided underwriting for TIRX.

  • The filing for this Company was initially registered on May 7th, 2021. The same date as Singular Genomics (which debuted today)… for reference, other IPOs that debuted this week filed between May 3 – 7, including FLYW (May 3), DAWN (May 4), FIGS (May 5), OMIC (May 7).
    So given the timeline, we could expect to see this stock debut this week.
    NOTE: Fridays have been especially ripe for Stealth IPOs.

Ok, so I think I’ve strung this out long enough… the company I am looking at is

Golden Sun Education Group Ltd (GSUN)

There’s really no reason to go into what they do: they are a private education provider offering Spanish tutorial services in China. With one premium private school, three tutorial centers, one educational company that supports language studies for other schools, and a logistics company for schools. They are seeking to raise $28M through the IPO.
Their website is typical of these Chinese IPO companies: http://www.jtyjyjt.com/

Anyway, that’s not the point. The point is that it looks a lot like the other IPOs we’ve seen from random Chinese companies that have gone parabolic on the debut.

WARNING: SOME HAVE ALSO CRASHED.

Last week we saw JZXN crash from a debut of $45 with no reprieve for bag holders. And Network 1 has debuted other IPOs for education companies that have also flopped (HYW, CNEY, among others).

Then again, many of their IPOs have randomly spiked weeks or months after their IPOs… but that doesn’t mean I want to be stuck bag holding one of these.

Still, I’ll be keeping a sharp eye out for GSUN, and will provide updates to you all through this newsletter and on Twitter as I see further developments.

Stay tuned…

Note: none of this is financial advice… it’s for informational purposes only. Trading IPOs can be very risky. I am not a financial advisor, and as always, trade your own trade. Good luck!

Continue reading

  • 1
  • 2
The information on this site is for informational purposes only.
We are not a licensed financial advisor, and this is not financial advice.
© All rights reserved
IPOWarriors.com.