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IPO Trading Review for the Week of May 2, 2022 – May 6, 2022

IPO Trading Review for the Week of May 2, 2022 – May 6, 2022

May 8th, 2022

The market got wrecked all week, culminating its worst day for as long as many traders can imagine: but you wouldn’t know it from how IPO debuts performed this week. Ok, so a bunch of them rescheduled due to market conditions (or in one case, a question from the SEC), but those that did debut continued to show strong upside for debut plays… even the first brand-name mainstream IPO we’ve seen this year.

We’ve seen a string of low float / off-brand IPOs run in the past few weeks: going back to GNS, JCSE, OST, HLVX, and now AUST While most of these owe their runs to withheld volume on the debut, at least one of them appears to have run simply on retail enthusiasm around this setup. I expect that we may see this trend continue for the next low-floater to debut, until we reach a point where the debut premium gets over-inflated by high demand, and the opening price proves too tempting for allocation holders to hold. This will produce a front-loaded opening trade with no follow-through buyers to produce the pump. One or two of those should cool off the trade for a while: at that point, we can look for Day 2 rallies to re-emerge until the cycle of opening debut pops resumes.

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Ok, Let’s take a look at what happened last week in IPO Land:

Failed to Launch:

  • Actelis (ASNS) – Moved to May 10, 2022

  • SOS Hydration (SOSH) – Moved to May 10, 2022

  • Novusterra (NOVS) – Pulled, no further information

  • Wytec (WYTC) – Pulled, no further information

  • SaverOne (SVRE) – Moved to May 11, 2022

Last Week’s Debuts:

Austin Gold (AUST) – May 4, 2022 | 3M Shares
IPO Price: $3.00
Debut Price: $6.50
Day 1 High: $29.00
Day 1 Low: $4.15
High Since Debut: $29.00
Low Since Debut: $.88

Day 1 Action: This extreme runner caught everyone by surprise: though if you had insight into the pre-debut imbalance on AMEX (which I have not yet figured out how to view), the ultra-low volume and high debut premium would have been an obvious tip-off to the run that ensured the opening trade. With just under 35k shares exchanged on the opening print at $6.50 the halt up to $7.15 was immediate, and after over an hour of haltage time, it then opened at $12.04 and immediately halted again at $13.20. The halts weren’t done yet, and several more would culminate in a peak at $29.00 before it leveled out in the $27.00 to $29.00 range before a fire sale brought the stock crashing down nearly as fast as it had ascended. There would be no meaningful reversal on the bleed out into the close. At the end of Day 1, a stock that had priced at $3.00, opened at $6.50 and run to a high of $29.00 would close the day at just $4.35.

Day 2 Action: After a monstrous run on Day 1 followed by an extreme sell-off, Day 2 was setup for accumulators to run the price again in pre-market and we saw a 4:00 AM rally peak at $6.15 with an secondary push up as high as $5.80 following the opening bell. But that was as much of Day 2 rally as AUST could muster, and the share price quickly returned to the mid-$3s for most of the day. A weak rally around 2:00 PM EST couldn’t get past $4.20, and the share price closed at $3.72

Looking Ahead: This one as been played out, but is still a low-float IPO that can fly on any sort of PR catalyst. I’d watch this one to drop below $2.00 before starting to accumulate any kind of position, and likely won’t bite unless I see it drop significantly below that before its LPX. At $1.30 or below prior to LPX, it’s likely to be a relatively safe bet: at some point they’ll announce a permit to dig, contract of some sort, or in the dream scenario for bag holders and swing traders alike: that they’ve struck gold.

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Edible Garden (EDBL) – May 5, 2022 | 2.93M Units
IPO Price: $5.00
Debut Price: $3.00
Day 1 High: $3.00
Day 1 Low: $2.46
High Since Debut: $3.00
Low Since Debut: $2.40

Day 1 Action: After increasing the share offering from 2.14M units to 2.93M units, and pricing below range at $5.00, this one may have looked interesting to day traders who had picked up on the recent trend of ripping low-float IPO debuts. Experienced low-float debut traders would have seen the writing on the wall, with a heavy sell-side imbalance in the pre-debut pricing, and volume up at 296k shares lined up for the opening print. The stock proceeded to drop all the way down to $2.46 before climbing back up to $3.00 and traded in this range for the remainder of the day, closing at $2.89. While not a particularly damaging play for anyone who got duped into buying the debut, and easily mitigated if followed up with buys down at $2.50 – $2.60 to bring your average down, this was not a debut where I saw any clear entry points. The opening dip was simply not low enough to interest me in a play: I had my target at $2.15, and the end of the day did not produce a significant sell-off.

Day 2 Action: Day 2 did not deliver any early pre-market spike, and based on the Day 1 pattern, none should have been expected, since traders kept jumping on any dips and selling off any moves approaching the Day 1 opening price. It actually sold off into the open, hitting a low of $2.40 about 10 minutes before market open, which then setup a run back up to just over $2.80 before volume began to wane.. still, the price held $2.55 for the rest of the day, and it walked its way back up to a close at $2.83 on Day 2. Some interesting after-market trades including 5,000 shares bought up in the $2.95 – $3.00 range could indicate a further action on Day 3.

Looking Ahead: We haven’t seen this one make any kind of serious move yet, while holding its trading range pretty tightly in the $2.50 – $3.00 range, which indicates that some traders may be accumulating a position with the intention of pumping it in the near future. Day 3 is Monday, so keep an eye on this one… Remember that the IPO price was $5.00, so insiders – including the underwriter – would love to see this run up to $5.50 in the near future: It won’t surprise me at all if we see a pump into this range at some point this week.

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Bau(PEPG) – May 6, 2022 | 7.2M Shares
IPO Price: $12.00
Debut Price: $15.60
Day 1 High: $15.60
Day 1 Low: $11.50
High Since Debut: $15.60
Low Since Debut: $11.50

Day 1 Action: I don’t call these “Biotech Busts” for nothing: and this one lived up to its designation as one: debuting at $15.60 after pricing at $12.00 and immediately selling off in the opening minutes down through a halt to a bottom at $11.50. Brave traders who attempted to catch a reversal off the IPO price at and below $12.00 were rewarded with a bounce back up to VWAP at $13.27, and an eventual carry-through that touched $13.88. It then base-lined around the $13.00 range for the rest of the day.

Day 2 Action: I’m not a big fan of biotech stock IPOs in general, as they are difficult to predict and don’t really follow the same trends as ultra-low float IPOs when the float is above 5M shares. It’s still trading above the IPO price, but in the $13.00 range and over 7M shares in the float, I doubt this gets much attention from day traders, and I have no clue as to where to value this in terms of how institutions might see this: short of saying that above $12.00, it’s not a value buy based on where they priced the IPO.

Looking Ahead: Not the kind of stock I’d trade. Maybe if it gets obscenely low: like $2.30 or below before LPX. Otherwise, it’s not something I can predict and if I had to make a guess one way or another, I’d put my money on it going down from here long before it proves any value to legitimize a move to the upside.

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Bausch + Lomb (BLCO) – May 6, 2022 | 35M Shares
IPO Price: $18.00
Debut Price: $18.51
Day 1 High: $20.17
Day 1 Low: $18.40
High Since Debut: $20.17
Low Since Debut: $18.40

Day 1 Action: As the first brand-name mainstream IPO of the year, there was a lot of pressure on the underwriters to price and debut this stock to minimize upside: given market conditions on Friday, that meant pricing it at just $18.00 – well below the stated range of $21.00 – $24.00. The lead underwriter on this deal: Morgan Stanley, has a generally positive reputation for leaving some room on the table for retail traders to get in on the debut: and the relatively conservative opening print at just $18.51 on a volume of 2.69M shares gave this stock some room to run, with an opening climb that reached $19.34 before profit taking saw it fall slightly down to $18.75 before rebounding back to $19.35 and base-lining around $19.00 into the afternoon. The final 2 hours of Day 1 saw this one rally up into the high $19’s and a final push in the closing minutes saw it breach $20.00 at a high of $20.17. The total volume for Day 1 reached 15M shares.

Day 2 Action: We’ll see what Monday brings to the general market, but if the market can’t shake off the downward trend, this may begin to follow suit with little demand to support any selling pressure. On the otherhand, at any price below $20, it appears to be slightly undervalued, at least based on the IPO prospectus valuations, and we should expect some support at the $18.00 IPO price. So any dips below that could be opportunities to scalp quick turnarounds.

Looking Ahead: I’ll keep an eye on this one for any dips below $18: particularly if we see anything touching significantly below that, for a scalp on a reversal. The underwriter is likely to protect the downside at some level, and given the initial price range at $21-24 and IPO price at just $18, I think this can come back up to the $22-23 range if the market rebounds at all.

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IPO Trading Review for the Week of April 11, 2022 – April 15, 2022

IPO Trading Review for the Week of April 11, 2022 – April 15, 2022

April 16, 2022

Despite weakness in the overall market, we still had 3 IPOs debut last week, including a rare mainstream IPO opening at a robust price. For the most part, we got what we had expected in each of the debuts, despite issues with many trading platforms mishandling the ticker symbols on the opening day of trading for a couple of these.

Generally speaking, when one or more major trading platforms fumbles the handling of a new ticker symbol on an IPO, I take that as a sign to stay away from a debut buy-in, simply because it stands to reason that demand will be reduced. There are exceptions: particularly if I feel that a Stealth IPO is in the works (as we saw last week).

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Catch me live at 12:00 PM EST (noon) on Benzinga Live to review last week’s winning IPO trade and preview the IPO Calendar for the week ahead.

Watch my Twitter feed for the link:
https://twitter.com/WarriorIpo

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Ok, Let’s take a look at what happened last week in IPO Land:

Genius Group (GNS) – April 12, 2022 | 3.27M Shares
IPO Price: $6.00
Debut Price: $15.11
Day 1 High: $36.55
Day 1 Low: $13.08
High Since Debut: $36.55
Low Since Debut: $6.60

Day 1 Action: As expected, this turned out to be a ‘Stealth IPO’ – and fortunately, it didn’t debut at an absurd premium (relatively speaking). After pricing at $6.00 per share, this one opened up for trading at $15.11, giving retail traders an opportunity to get in before it went on its hectic run of halts up to a high of $36.55.
Unfortunately, for me anyway, I underbid the debut, as it was an AMEX listing where I was unable to get an accurate pre-debut price indication. In reality, it wouldn’t have been possible to take a large position on the debut without affecting the opening price anyway, since only 9,617 shares were traded in the opening minute before the halt.
Unlike other Stealth rippers, GNS halted back down below the initial debut price before embarking on a second string of upward halts to reach its Day 1 apex. Perhaps the fact that it was untradeable on platforms like WeBull played some role in this, though Stealth IPOs are one of the rare instances where I will go against the axiom that IPOs where the tickers are not supported on all platforms are best avoided for debut trades.
After GNS reached the pinnacle of its halt action at $36.55, it sustained a downtrend that saw it establish a base at the $27 level before briefly falling down as low as $22.88 before climbing back as high as $32.00 to level off the day to close at $30.90 with not much action in post market trading.

Day 2 Action: GNS got dumped like a lead boot in early pre-market trading on Day 2, and those who acted quickly (and had access to 4:00 AM EST trading) were able to pick up shares down as low as $11.73. Surprisingly, this was a relatively high conviction trade for those who have seen this setup before, and as expected, it sustained a run all the way through the market open: culminating in a halt in the opening minute of trading at $31.75, which opened at $34.98. But it was a heat-attack inducing free-fall from there: with two halts down to a bottom of $18.50, saved by a sharp reversal back up to $28.47 that petered out to trade a in a choppy range from $20-$25 for the remainder of the day, closing on a sell-off that saw it drop from $23 in the final minutes of trading to a close at $19.43

Looking Ahead: This one already died on Day 3: opening at $19.57 and rolling downhill all day long, with little sympathy for any traders who tried to call a bottom at any point along the way. It bottomed out at $6.60 and then baselined in the range of $7.00 to $7.50 for most of the remainder of the day, with an end of day rally that pushed it back up to $8.45 before closing the week at $7.95.
With the float having ballooned up to 21.52M shares – accounting for 100% of all shares outstanding according to WeBull stats, it seems safe to assume that it’s time to move on from this IPO.

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Excelerate Energy (EE) – April 13, 2022 | 16M Shares
IPO Price: $24.00
Debut Price: $28.12
Day 1 High: $28.30
Day 1 Low: $26.61
High Since Debut: $28.50
Low Since Debut: $26.61

Day 1 Action: The debut of Excelerate Energy was no doubt hampered by restrictions on its ticker by none other than Etrade… particularly ironic because Morgan Stanley (they own ETrade), was one of the underwriters on the deal. Supposedly, whomever placed the restriction on the “EE” ticker prior to the trading debut, which is standard for IPOs that are offered to retail clients but which is typically lifted prior to the actual debut, placed a “caveat emptor” restriction on the symbol: a mistake that could not be undone for 24 hours.
Anyway, as I was unable to trade it on Day 1 in my primary account, I simply watched the debut drop off as expected, and from an open at $28.12, was able to start a position down at $26.85 (the bottom of the opening drop was $26.61).
From there it quickly rallied back as high as $27.51 before again dropping down to $26.66 and yo-yoing between $26.80 and $27.40 for most of the day, with an end of day rally that reached $27.80 that was sold-off into the close where it finished the day at $26.85.
Seems the book runners on this deal managed to deliver a decent win for IPO buyers who got in at $24.00, but didn’t leave any room for retail traders to profit from a debut trade: though again, ETrade messing up the ticker listing could not have helped demand materialize for this one.

Day 2 Action: With full access to the ticker, the stock rallied in pre-market to open at $27.38, and after initially stumbling out of the gates to a low of $26.89, rallied to a high of $28.50 before closing at $28.00.

Looking Ahead: This one could be just getting started, particularly if gas prices keep escalating alongside turbulence in the Russia/Ukraine war theater. I’m a bit salty at Etrade for messing up the Day 1 trading, as my intention had been to take a sizeable position on the Day 1 dip, and hold it for several weeks. I did attempt to enter on Day 2, but my $26.65 limit order was too low, and I was trading away from my work desk so had to kind of ‘set-it-and-forget-it’ on the trade. If I can get into this one under $27 in the next week, I’ll probably take a stab at getting in on it: I believe it runs into the $30’s in the not-so distant future.

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Sharps Technology (STSS) – April 15, 2022 | 3.75M Units
IPO Price: $4.25
Debut Price: $2.65
Day 1 High: $2.70
Day 1 Low: $1.98
High Since Debut: $2.70
Low Since Debut: $1.98

Day 1 Action: This was hot garbage from the start: after pricing the units at $4.25 it opened for trading at a pithy $2.65 and pretty much dropped from there: initially entering free-fall in the opening seconds to a bottom of $2.11 from which it managed a bounce back to $2.67, but the was all downhill from there. I bottomed out at $1.98, but essentially baselined between $2.00 and $2.20 for most of the day. Appears that pumpers may have been accumulating a position around the $2.05 mark, which is where I entered a swing trade for a hopeful Day 2 spike. I’ll be up at 4:00 AM EST trying to catch an pre-market opening surge to sell my shares in the WeBull account, and look for a spike into the market open for a chance to sell out of my ETrade account. If we don’t see any action in pre-market, I will still expect a halt up at some point on this ticker on Monday.

Day 2 Action: These super-low float plays that fall hard on Day 1 have recently experienced a jump at some point on Day 2: usually in early pre-market (4:00 AM EST), and into the market open, if not shortly thereafter. The key here is not to be greedy, so don’t expect more than one halt up. I’ll be getting out after any upward halt, and don’t intend to be holding this by the end of the day regardless.

Looking Ahead: This one should die off for a while, untill it becomes an LPX play: so keep an eye on the lockup expiration dates (hint: follow Aly Angel ). I’ll be watching this one to build a position down near the $1.00 – $1.20 level if I get a chance before it pops. With warrants involved and an ultra low float, you have to expect they debuted this IPO with an ace up their sleeve. Won’t take more than a distribution contract or FDA type announcement to pop this thing back up to the exercise price, which I believe will be in the $4-$5 range.

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NOTE: this is not financial advice, and I am not a financial advisor: this information is just my opinion and is for informational purposes only. I may have or take positions in the equities mentioned in this article in the next 72 hours. Trading equities is risky. Do your own research,and trade your own trade.

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IPO Trading Review for the Week of March 21, 2022 – March 25, 2022

IPO Trading Review for the Week of March 21, 2022 – March 25, 2022

March 27, 2022

IPO Trading Review for the Week of March 21, 2022 – March 25, 2022

The market has continued to rally, and recent IPOs are rebounding along with it. If the trend continues, we’ll hopefully get some mainstream IPOs on the calendar soon. When we do see a lull in IPO activity, the first ones to come out of the gate are often priced rather conservatively compared to those that debut in markets that are already hot. As we saw with GFS and CRDO, these have been great plays to hold for a week or more for extended gains.

Meanwhile, low-float IPOs have been the only game in town for IPOs, and we’ll have to see what Monday morning brings for the two debuts we had last Friday, but it does appear that there has been greater interest on Day 1 in both of these deals, and if we do get a Day 2 run in one or both of them, I expect the debut trade to come back into play on one of the next upcoming low-floaters: provided the market continues to rally.

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Before we jump into the recaps: most of a you are probably aware of the fact that I’ve recently had to evacuate my family (pregnant wife, 2 year old daugher, and 2 dogs) from Kyiv, Ukraine – where we had been living for the past 3 years. A few members of the IPOW community have asked me if they could make a donation or contribution to help out. While I’m doing alright and have savings in my trading account, I try not to touch that money, and this whole episode has been a pretty significant financial hit.

For anyone who would like offer some personal support, I’ve gone ahead and setup a GoFundMe account –

https://gofund.me/400de027

I would also like to encourage those who want to help those in greater need than my own to donate directly to a refugee fund.

Dyakuyu.

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Ok, Let’s take a look at what happened last week in IPO Land:

Locafy (LCFY) – March 25, 2022 | 1.97M Shares
IPO Price: $4.00
Debut Price: $3.34
Day 1 High: $3.64 (after hours)
Day 1 Low: $2.24
High Since Debut: $3.64
Low Since Debut: $2.24

Day 1 Action: This one clearly telegraphed a drop off the debut, and fell quickly from the open at $3.34 to an initial base at $2.80 before climbing back up to $3.24 on light volume and large spreads. For a while, it looked like it would follow the usual playbook for recent low-float IPOs, and fade out for the remainder of Day 1 as shares were accumulated by pumpers in anticipation of a Day 2 run. But after failing to stage a significant breakout above $3.00 within the first hour of trading, a large sell order knifed the price down to $2.71, and panic sellers began heading for the exits. Watching the Level 2 orders, we could see accumulators pull their bid prices down to the $2.40 and $2.50 levels, but appeared to be disciplined in allowing sellers to come to them, rather than begin to outbid each other in raising the price. Volume remained thin until right before 2:00 PM EST, when some large orders came in and the stock spiked up into its first halt at $2.90, with an open at $3.00. Traders took this opportunity to dump their positions, and the stock again dropped – bottoming at $2.56 before accumulators stepped in to stabilize the price at the $2.56-$2.65 level.
From there, buyers started steadily outbidding each other, which culminated in an end-of-day run that spiked into a halt at $3.34 with just 8 minutes left in market trading. After-hours saw the stock open at $3.36 and make a gradual run up to as high as $3.64, as day traders and social media accounts began calling out the stock as a play for Monday.

Day 2 Action: We’ll see on Monday

Looking Ahead: This is poised to be pretty volatile on Monday, but it seems that many day traders were already on it by the final hour of trading on Monday. I think this has some pretty solid upside potential until it pops. I expect a spike in early pre-market on Monday, and very likely second spike on the open. But given how many traders already piled in at the end of the day on Day 1, it may be a case where the trade already got played out. We typically see 2 spikes on these, but after the early pre-market spike, it’s a bit tricky to pick off the bottom of the pullback before the second spike. Too early, and you could be stuck bag holding, too late, and you could miss it. I’ll be looking to see if we get down to about $2.60 in pre-market after the initial spike. If it doesn’t come, then ok. This will be an interesting one to watch on Monday, and any entry under $3 has somewhat limited downside potential, with QPX and LPX off in the not-so-distant-future to bail out bag holders who get stuck.

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AN2 Therapeutics (ANTX) – March 25, 2022 | 4M Shares
IPO Price: $15.00
Debut Price: $16.85
Day 1 High: $17.80
Day 1 Low: $15.00
High Since Debut: $17.80
Low Since Debut: $15.00

Day 1 Action: I don’t like to trade biotech IPOs, and certainly not on the debut. This one dropped out of the gate from $16.85 to $16.25, but then quickly reversed into a short lived run up to $17.80. If you bought the dip, and set a trailing stop loss, you may have been able to turn a quick $1 profit, but if you weren’t able to get out in time, you ended up getting stuck in what would turn out to be fading volume that bottomed out at $15.50 before reversing back up as high as $17.00 before fading out to close the day at $15.40 after touching as low as $15.00 even right before the closing bell.

Day 2 Action: We’ll see on Monday

Looking Ahead: While this is a very low float IPO, with just 4M shares, and we did see relatively low volume with a dip into the close, the price up at $15.00 simply leaves too much downside risk and is not the kind of setup that typically appealing to day traders and trading groups responsible for running most of the low float IPOs on Day 2. More often than not, biotech IPOs fall for several days off the IPO, and do not run again until they reach some kind of FDA announcement. My guess is that this one falls below $10 before any kind of substantial news gets announced, which could be months or even years off in the future. While certainly possible that it could be pumped with such a low float, the high price point makes it a less appealing and more expensive target than the $2-3 variety. I’ll have this on my watch list by default, but am not going to take any risk on playing a hopeful Day 2 run on this one. There are other interesting low-float IPOs coming up this week so don’t wanna get stuck bag holding a biotech (again).

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IPO Trading Review for the Week of February 14, 2022 – February 18, 2022

IPO Trading Review for the Week of February 14, 2022 – February 18, 2022

February 20th, 2022

First Off: Priorities…

Just wanted to send an update to the IPOW Community on my personal status: as many of you know, I live in Kyiv, Ukraine with my wife and daughter and two dogs (Shiba Inus)… due to the political situation with Russia, we decided to pack much of our stuff, and drive out of Kyiv late on Sunday night a week ago (more like early Monday morning) and were posted up in Lviv, Ukraine last week. The idea has been to be out of Kyiv and closer to the Polish and Hungarian borders.

We then took a short trip up to Bukovel – a tranquil ski town set up in the Carpathian Mountains: about 4 hours drive from Lviv, with plans to assess the situation in Ukraine after this weekend and decide what to do next. It seems at this point that we will go ahead and set out to Western Europe – first to Poland and probably next to Portugal – in the next few days to see what Putin decides to do next.

As a result of being tied up with packing, planning, and executing our evacuation, I was unable to put together a weekly recap of the prior week’s IPO trades, and wasn’t been able to prepare a write-up for last week’s upcoming IPOs (I also skipped the Monday Benzinga appearance).

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But I’m still following the market, and wanted to do a quick catch up on last week’s action, and will do my best to get a preview newsletter out for this week’s IPOs. (gonna go back to the old format for now, and will resume the more comprehensive format once I get settled in place again).

Ok, Let’s take a look at what happened last week in IPO Land:

Meihua (MHUA) brought us the first Chinese IPO since the SEC decided to put a halt on new listings from Chinese companies after DIDI pulled an unprecedented move and announced it would de-list from the NYSE just weeks after it’s IPO. At first MHUA’s debut signaled a broken start – as it opened trading at the IPO price of $10.00 and immediately sold off, likely by retail allocations that were unhappy with the lack of any kind of debut premium. The low-float then appeared to kick in as it It then quickly rebounded back up from a bottom of $8.42 into a halt at $10.48, and proceeded to embark on a series of up/down halts that ultimately culminated in a peak of $14.80 before stabilizing in the $12-13 range. Hopes of a continued climb throughout the day materialized only through a short lived run back up to $14.44 before again leveling off between $12.20 and $13.00, closing Day 1 at $12.92.
Day 2 provided more volatility, with an opening drop to as low as $10.00 followed by a jagged run up to a high of $12.98, which then fell off throughout the remainder of the day to close at $9.00.
Since then, it seems the attraction of this stock has faded out – and has since fallen (along with the rest of the stock market), to close the week at $8.16
My guess is that we don’t see much demand in this one for a while, and with a weak stock market and shorts attacking everything: especially low-volume equities with waning demand, the bottom on this one has not yet been reached.

Smart for Life Inc (SMFL) continued the trend of poor debuts for random low-float IPOs bombing off the debut, although this one was especially bad. After pricing units at $10.00 (each unit consists of one share, and two warrants), this one opened trading at $3.25 and spent the first hour of trading basically taking a staircase down to a basement of $2.26 before gradually scratching its way back up to $2.76 before closing the day at $2.68.
Day 2 offered no salvation, as no Day 2 rally materialized, and at the close of Day 2 it had regressed to $1.84.
As if things couldn’t get any worse, Day 3, the selloff continued into the close of the week, and Friday’s close saw shares trade at just $1.34
I wasn’t following this one, and can’t see any reason why there would be much excitement for a nutritional/health/wellness brand, but with just 1.8M shares in the float, and warrant redemption up at $7 and $10 (two classes of warrants), it seems like this one is due for a low-float squeeze at some point – the question is whether it will fall much further before it gains the attention of any trading groups who could pump it.

Blue Water Vaccines (BWV) Looks like Boustead got back into their normal underwriter shenanigans as perhaps a makeup play for their customers who took a bath on HTCR (which has behaved unusually ‘normal’ for a Boustead-backed deal)… BWV priced at $9.00 and debuted at a lofty $50 and provided chaotic volatility from there on just 132k traded shares out of a free float of 2.22M shares. Hard to describe the movement on this one, asides from an opening dump down to a Day 1 low of $38.00 on less than 5k shares traded, with a halt-littered rally back up to $50.00, and spotty trading throughout the day (big spread and low volume). It peaked at $57.50 and again hit $57.36 – though the volume on those 1-minute candles was only in triple digits… it touched $60.00 in after-market trading (on 207 shares), but generally speaking, this was a very difficult stock to trade on Day 1,and given the evidently low number of shares being actively traded, nearly impossible to guess what this stock will do in the short term. Given what we’ve seen in similar setups in the recent past (AERC, OP, TKLF), I would venture to guess that within a week we see a seller step in and send this back to single digits: until then, things should be pretty volatile, and trying to play any dip in this could be either very lucrative or disastrous – it’s not something I’d wanna try to get involved in either way.

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I think the key takeaways from last week are that the low-float IPO theme has become a bit played out again – we see this trend repeat itself over-and-over: low float IPOs cool off and go dormant for a bit, then a hot one comes out and rips (this run started with HOUR). The next phase is for a few low-float IPOs to come out with mixed results, often with strong Day 2 rebound rallies (KSCP, MTEK, HTCR), and finally, over-saturation and too many traders jumping on the trade before any of the dynamics behind the runners can materialize. Essentially, the runners work because no one was expecting them to run and only a handful of pumpers were able to accumulate shares before promoting the stocks. When too many traders pile in early, the debuts get over-heated, the dips are less severe, and there are too many bag holders selling out of any runs.

It doesn’t help at all when the whole market crashes either. Having said all that, SMFL looks like one of the worst low-float IPOs I’ve ever seen, and while knowing nothing about the company, have to believe that at some point, the low float and severely depressed price point provide conditions for a boost once the market gets over the Russia-invasion threat.

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As for my personal safety and security situation, I appreciate the expressed concern from the IPOW community, and hope that all of the drama is overblown and that diplomatic remedies are swiftly implemented. It’s a different kind of ‘risk management’ than what we deal with as traders, but the same lessons apply. I feel I may have already held out hope for a peaceful resolution longer than is safe, but also question whether the decision to leave – and associated costs and risks – is logically founded or just a reaction to media hysteria. Ultimately, the downside risk of being caught up in a war zone drives me to take the difficult steps of temporarily relocating my family ( my pregnant wife, nearly two-year-old daughter, and two dogs) across national borders for the sake of avoiding a danger that may not manifest. Of course, it also means that I cannot justify actively trading beyond managing my account (yeah, gotta keep myself out of margin calls) – so while I am usually trading on my ideas, for the time being, I’m only able to share ideas and strategies from which I hope the IPOW can benefit (of course, this is all just informational – right?)

Anyway, good luck to everyone, and keep an eye out for this week’s IPO Preview – I’ll most likely send it out on Tuesday, given that Monday is a holiday, and I think we have a pretty thin week ahead.

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IPO Trading Review for the Week of January 31, 2022 – Febuary 4, 2022

IPO Trading Review for the Week of January 31, 2022 – Febuary 4, 2022

February 6th, 2022

Despite a rally in the general market, mainstream IPOs are still on hold, leaving low-float IPOs, biotech, and bank/financial debuts as the only options available on the menu. Not much worth playing, but still some opportunities to watch and learn, build up the mental index, and even take some relatively easy profits.

While we continue to avoid the debut entry on these low-float IPOs, catching the dip and undercutting the opening bid have provided some stress-free entries that have paid off, along with the Day 2 pump setup… but don’t be greedy: nothing is running for long, and smart day traders are acting quickly to lock in wins.

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Catch me live at 12:00 PM EST (noon) on Benzinga Live to review last week’s winning IPO trade and preview the IPO Calendar for the week ahead:

https://www.youtube.com/watch?v=DOdJoxesHGM

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Ok, Let’s take a look at what happened last week in IPO Land:

Rescheduled or Cancelled:

– Direct Digital (DRCT):
Rescheduled to Next Week
Samsara Vision (SMSA): Cancelled/Delayed

Maris Tech (MTEK) – February 2, 2022 | 3.7M Units (1 Share + 1 Warrant)
IPO Price: $4.20
Debut Price: $3.00
Day 1 High: $3.48
Day 1 Low: $2.71
High Since Debut: $3.83
Low Since Debut: $2.57

Watch the Live Stream of this Debut:
https://www.youtube.com/watch?v=uidon7YYKU0

Day 1 Action: We saw a heavy sell-side imbalance at the $3.00 price in the pre-debut IPO crossing, and called out the expected drop down to a possible halt, which would be at $2.70. So we placed our entries just above $2.70 and were rewarded with an ideal entry off an opening drop to exactly $2.71 that bounced back into a run that topped out at $3.48 before losing steam and fading back down as low as $2.80 – the perfect setup for a trailing stop loss to secure a stress-free win. An end of day run brought this back as high as $3.30, so if you missed the chance to exit on the initial spike (no reason to have not sold out with a trailing stop loss).

Day 2 Action: This one delivered the Day 2 run we’ve come to expect from these low-float IPOs that fail to make a significant pop on Day 1, with a run from the $2.80s up through a halt to top out at $3.83. Perhaps a better win opportunity, but a less certain boost than the opening dip-to-run than we caught on Day 1, but still another trend repeating itself, and a good indicator that we can hope for such setups on future low-float IPOs.

Looking Ahead: I expect this one to settle down for a little while, but with warrants executable up at $5.25, there is plenty of incentive for MTEK to make an attempt at boosting its price once QPX expires in about 35 days… an announcement of a large military contact would likely be sufficient send this low-floater on a run. If you’re bag holding, consider waiting to see if you get an opportunity to sell on such a spike, and don’t get greedy: you’re likely not to be the only one holding at your level: so if you are lucky enough to ride this into a green position, set a stop loss at the non-loss level and steadily increase it if you have the chance to edge into some profits.

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Arcellx (ACLX) – February 4, 2022 | 8.25M Shares
IPO Price: $15.00
Debut Price: $19.00
Day 1 High: $19.00
Day 1 Low: $15.79
High Since Debut: $19.00
Low Since Debut: $15.79

Day 1 Action: I mean, there’s a reason I don’t touch biotech IPOs, and we see again and again that especially when they debut with any kind of a premium, it’s nothing but downside. Priced at $15 at the low-end of range ($15-17), and after opening at $19, dropped down to $17 with further movement below $16.

Day 2 Action: This was a Friday IPO, so we don’t know what will happen on Day 2, but for most of these, we expect lower lows… not something to consider entering until it’s gone down to maybe $10s, and even then, why get involved with a Phase I pharmaceutical this early?

Looking Ahead: I don’t expect any pharmaceutical company that’s still in Phase I trials to deliver groundbreaking news on the QPX, so no reason to add a bag holding position to your portfolio. Better to stay away and find other trades.

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Nuvectis (NVCT- February 4, 2022 | 8.25M Shares
IPO Price: $5.00
Debut Price: $3.95
Day 1 High: $4.39
Day 1 Low: $3.21
High Since Debut: $4.39
Low Since Debut: $3.21

Day 1 Action: Even low-float pharmaceutical IPOs are generally busts… moreso when they aren’t available on multiple trade desks (WeBull and TD Ameritrade didn’t have the ticker setup for trading. Despite a slight bump off the open in the second minute of trading and opening flag just above the debut price, NVCT proved that it wasn’t worth the downside risk and punished those who like to take unnecessary chance on a biotech debut with a swift fall from the opening wedge around the $4.00 level down to a bottom of $3.21. Volume pretty much evaporated from there, and bag holders are left stuck in a position of hoping for a trading group pump on Day 2.

Day 2 Action: This was a Friday IPO, so we don’t know what will happen on Day 2, but for most of these, we expect lower lows… yeah, I copied an pasted that from the ACLX recap above… but this one has a better chance at a Day 2 pump than ACLX (if I had to choose between the two…. the better option is likely to just sit it out and wait for QPX if you’re dead-set on trading this one).

Looking Ahead: This one might be interesting to enter for a ‘want-and-see’ position below the Dental Line (tooth-hurty) going into QPX, but even then it’s kind of a stretch given how early they are in Phase I for their lead candidate..

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NOTE: this is not financial advice, and I am not a financial advisor: this information is just my opinion and is for informational purposes only. I may have or take positions in the equities mentioned in this article in the next 72 hours. Trading equities is risky. Do your own research,and trade your own trade.

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IPO Trading Review for the Week of
January 24, 2022 – January 28, 2022

IPO Trading Review for the Week of January 24, 2022 – January 28, 2022

January 30th, 2022

Despite unfavorable market conditions, we saw a few IPOs get pushed through last week, including one mainstream debut that unfortunately, more likely sent a warning sign to other companies that are considering going public over the next few weeks.

We also saw that while the debut trade may not be the best approach to low-float IPOs, there are still some tremendous opportunities to bank profits on well-timed runs off of baseline plays. I have not mustered the conviction to play these, but did point out a likely run that went parabolic on Day 2, and will continue to point out potential runners going forward.

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Catch me live at 12:00 PM EST (noon) on Benzinga Live to review last week’s winning IPO trade and preview the IPO Calendar for the week ahead:

https://www.youtube.com/watch?v=MgeAV3AiX2E


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Ok, Let’s take a look at what happened last week in IPO Land:

FGI Industries (FGI) – January 25, 2022 | 2.5M Units (1 share + 1 warrant)
IPO Price: $6.00
Debut Price: $5.00
Day 1 High: $5.53
Day 1 Low: $3.75
Dey 1 High after Low: $4.26
High Since Debut: $5.53
Low Since Debut: $2.94

Day 1 Action: This one played out as predicted, with a drop off the debut at $5.00 into a halt down at $4.53, which then rallied into an open at $4.85 that peaked at $5.53 and fell off from there. Too unpredictable, and generally unattractive to day traders when there’s warrants involved. It found a bottom at $3.75 and made a weak rally up to as high as $4.26 before trailing off into the close: the market was basically on its knees with no interest in piling into a no-name IPO. The only hope for this one was that it was a Stealth IPO, which didn’t appear to be the case given the warrants.

Day 2 Action and Beyond: , This one basically moved with the rest of the market midweek (downward) and hit bottom at just below $3 right before Friday’s open. And along with the rest of the market, it made a strong reversal from there, with a run back into the the mid $3s followed by what appears to have been a sympathy run off the KSCP takeoff into an after-hours run up to as high as $4.48 on Friday after the closing bell.

Looking Ahead: Day traders are prone to key in on recent low-float IPOs at any moment, though the ideal play is to pick these off before they make any kind of upward run. Down under $3 is where I like to pick up $4-6 IPOs, as the downside is far more limited. At $4-5 this could still get pumped, but with Chinese companies, if they aren’t clear Stealth/Scam plays, I tend to think the market will ultimately shun them. Then again, 2.5M shares plus 2.5M warrants is still low enough of a float to attract pump-and-dump groups. If you picked up shares in the $3.00-$3.50 range on Friday, or you’re bag holding from earlier in the week, maybe hold for further action, but I’m not sure that buying and waiting for this one to run at an entry above $4.00 makes much sense. If it does drop again, it could still get pumped. Until it gets run over the IPO price, the potential for a pump is still in the cards.

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Credo Technology (CRDO) – January 27, 2022 | 25M Shares
IPO Price: $10.00
Debut Price: $12.10
Day 1 High: $12.50
Day 1 Low: $10.80
Dey 1 High after Low: $12.50
High Since Debut: $12.50
Low Since Debut: $10.80

Day 1 Action: CRDO was likely willing to test the waters of the market due to having roughly 60% of IPO shares accounted for by investment bankers such as Blackrock who pre-committed to buying shares before IPO was conducted. After setting a price range at $10-12, and pricing the IPO at $10, things were not looking all that strong for this debut: further demonstrated by a heavy sell-side imbalance that presisted throughout the pre-debut crossing, as Goldman (and market makers) attempted to push the debut price up as high as $13.50 before acquiescing to sell-side demand and going live at $12.10. As a rule, I’m not gonna buy into an IPO debut where the sell-side imbalance shows prominently throughout the crossing, and the ensuing opening movement demonstrated why: as the price dropped hard to an ultimate bottom of $10.80 before baselining at around $11.00. The stock managed to launch a 30 minute rally into the turn of Power Hour, with a run up as high as $12.50 before failing in the final 30 minutes back down to close at $11.65. $11 is probably a pretty fair price to enter this trade if you like the company, so perhaps it was a safe play to test a position at $11 and exit at the open (or above with a stop loss), but not really enough movement to make this one all that interesting on Day 1 for any kind of high conviction trade.

Day 2 Action and Beyond: Day 2 gave a little bit of an upward move in the opening hour with a push up over $12 that tapered off back down to the $11.50 zone, and joined the rest of the market’s rally through the afternoon to again break through $12, but every rally in this one so far has been sold off back to the $11.50 region, and CRDO closed the week at $11.19.

Looking Ahead: The bottom on CRDO seems to be protected for the time being at around $11.00, but sellers appear to be taking profits whenever it tops $12.00, so this could be range bound in the short term. We don’t have options or shorting available yet: if this continues to trade thinly and the market continues to feel pain, shorts may sense weakness and push this down even further. I’m not sure it’s time to move in for a long position on this one if you like the company, but if we get down to $10 or below, that would be an attractive base for a rebound. Keep an eye on this one once the market stabilizes, we have to expect that institutiona money had some sense of the reasonable valuation on this one when they committed to large positions at $10, and likely negotiated a bargain in order to buy in amidst a severe correction in the market.

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Knighscope (KSCP) – January 27, 2022 | 4M Shares
IPO Price: $10.00
Debut Price: $14.44
Day 1 High: $15.48
Day 1 Low: $5.91
Dey 1 High after Low: $6.71
High Since Debut: $27.00 (after hours)
Low Since Debut: $5.91

Day 1 Action: After heavily promoting a pre-IPO share offering on YouTube and CNBC ads, Knightscope confusingly launched their IPO with almost no announcements. Priced at $10, with a low float, this one debuted with a hefty premium at $14.44, likely prompting many IPO holders to flip their shares on the debut: as it dropped immediately into a halt at $13.00 and continued to fall through 3 halts into a bottom at $6.84. One reason to avoid this debut, despite the apparent pre-debut demand, was that the ticker had not been registered with several trading desks, including WeBull and TD Ameritrade: and when I hear that buyers are not able to place orders, I can only assume demand will fail to materialize. Day 1 only saw volume of 1.6M shares, which basically means it was all but ignored by day traders who sometimes run low-float IPOs through the roof. The stock traded for most of the day in the $7.00 range, but ultimately fell off at the end of the day to post a low of $5.91. We did notice, and pointed this out on the live streaming coverage, that there were Buy Orders being posted at catch-points below the current price throughout the day that indicated someone (or some groups) were accumulating shares, and foretasted a potential pump in the near future… it would come sooner than I expected.

Day 2 Action and Beyond: Day 2 started out looking auspicious with a brief pre-market spike that ran from around $7.00 to touch $11.75 over the course of about 8 minutes. In hindsight, it appears that someone was buying up the overhead float to clear space for a run later in the day. The stock settled back do to as low as $6.20 before the market open, and appeared to be comfortably stable in the $6.60-6.80 range for the first 1.5 hours of the day. But at around 11:00 AM EST, what would eventually grow into a monster run began forming. The stock caught fire, and first ran up to $10 (the IPO price), flagged, and held the $12 level before falling off a little going into the turn at Power Hour before falling back down to $10. But the run wasn’t over, as momentum into the close pushed it to finish regular trading hours for the week at $16.29.
But wait, that’s not all folks: after-hours trading saw insanity pour into this one, and it touched as high as $27.41 before finally the end of extended trading hours wrapped up with the final trade marked at $22.20.

Looking Ahead: I don’t know where this one goes from here, but seems pretty dangerous to chase it, and don’t think there are shares available to short it. Maybe keep an eye out for options availability, but usually low float stocks don’t have them: would be pretty tempting to buy puts on this one if they become available. At some point this destined to fall.

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