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IPO Trading Review for the Week of October 17, 2022 – October 21, 2022

IPO Trading Review for the Week of October 17, 2022 – October 21, 2022

October 23, 2022

The mainstream underwriters finally were able to out-maneuver their lesser-esteemed counterparts last week, as a mainstream IPO managed to do what none of the low-float candidates on the calendar at the start of the week could manage, and debuted on a major exchange.

The results weren’t all that encouraging for future mainstream deals, and we’ve already seen Instacart scared off from attempting to list this year. Mainstream IPOs desperate enough to proceed in this market may be worth consideration based on the theory that retail traders would conceivably be getting an opportunity to buy in at a ‘more reasonable’ price than that which we were presented with in most IPOs over the past few years.

On the low-float IPO front, we’re still not seeing much enthusiasm in the retail sector to get any of the slated deals into the starting blocks, let alone provide a high-conviction setup for a significant allocation request or a debut trade. That may change if we can get a debut runner, but with all the scrutiny coming down from NASDAQ on these deals, it’s hard to imagine the underwriters being able to conjure their forces of market sorcery under such watchful eyes.

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

Prime Medicine (PRME) – October 20, 2022 | 10.3M Shares
IPO Price: $17.00
Debut Price: $18.97
Day 1 High: $19.00
Day 1 Low: $15.00
High Since Debut: $19.00
Low Since Debut: $14.40

Day 1 Action: PRME managed to drum up sufficient ‘smart money’ demand to not only debut at mid-range, but upsized the deal from 8.9M shares to 10.3M shares by the time they went live in a relatively weak market. Beyond that, the stock opened at a premium of $18.97 and for a minute, it looked like it might hold the debut price and muster a rally… a minute later, reality set in, and the stock started what would become a steady decline down to a bottom at $15.27 before it delivered any kind of reversal: a rally back up to $16.50 that ran out of steam long before the end of regular market hours, and before close it made new lows at $15.10 before a slight rally into the close at $15.37.

Day 2 Action: Day 2 pre-market spikes as high as $17.00 might look nice on the chart, but the volume was so low as to be meaningless (just 23 shares traded on that candle), but Day 2 did get started on the right foot, opening at $15.48 before dumping down to $14.94 within the first 15 minutes of trading. But from there it managed to climb back to as high as $16.24 on the day, closing the week $15.76.

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Recent IPO Runners:

I was on holiday last week, and will return to my desk Thursday this week, so I didn’t have my eyes on the daily movers, but it doesn’t seem like we had much action in IPO land last week. Hopefully with the 90-day LPX of the post-HKD slate approaching, we see some action in that sector.

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IPO Trading Review for the Week of September 26, 2022 – September 30, 2022

IPO Trading Review for the Week of September 26, 2022 – September 30, 2022

October 2, 2022

After a somewhat shorter-than-expected hiatus from the regular stream of low-float IPOs that had been debuting since mid-July, the regulators (namely NASDAQ), opened the door for a test-run under deep scrutiny. The results were just short of disastrous, and make the case for at least some element of shenanigans on the part of underwriters to help deliver some level of demand that outstrips supply in these setups.

And in another more obscure corner of the world of IPO debuts, we saw a Regulation A filing that showed us what kind of craziness can ensue when a company forgoes the traditional underwritten process of going public, with an IPO that could potentially lay the blueprint for Stealth IPOs to follow now that NASDAQ has seemingly cracked down on all Chinese (and foreign, for that matter), IPOs.

So now we’ve seen that the indiscriminate hype surrounding the debut of all comers to the low-float IPO scene has essentially disappeared, and the great likelihood that high levels of scrutiny will sequester high flying Chinese IPO, there are a number of short terms imprecations this has on trading strategies both for allocation requests and debut trades. I’ll go into this more deeply in this week’s weekly preview newsletter, but suffice to say, we’ve reached a point in this cycle of IPO hype/hysteria where we need to reconsider the “gimme-all-I-can-get” allocation request.

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

Atlis Motors (AMV) – September 27, 2022 | 1.85M Shares
IPO Price: 27.50
Debut Price: $30.11
Day 1 High: $300.00
Day 1 Low: $30.11
High Since Debut: $300.00
Low Since Debut: $19.81

Day 1 Action: As a Regulation A filing, this one slipped under the radars of most IPO tracking calendars, but the IPO Warriors community was on top of sussing this one out on the morning of the IPO, and was fully aware of the circumstances surrounding this comically disorganized debt. A quick explanation on what a Reg A filing is might be in order, as we haven’t seen one of these since Knightscape (KSCP) debuted on January 27, 2022, but one consistent factor to these has been high volatility following their debuts. A Reg A filing is an IPO where companies bypass the traditional process of employing an underwriter to sell IPO shares into the market to facilitate the initial public offering, instead, the company directly markets their offering to the public.
In the case of AMV, apparently Reg A investors were unable to access their shares on the day of the IPO, so there were no shares available to trade. According to Twitter accounts who claimed to have purchased IPO shares, AST Financial required shareholders to verify their tax ID numbers before transferring allocations to traders’ accounts.
Anyway, the result was a long delay in opening the stock for trading, and unfortunately, by the time they came up with any shares to float, I had gone out for the day. However, the IPO Warriors Premium community was covering this trade in real-time, and at least a few members were able to procure shares on the debut and early halts (though reports were that even some open limit orders failed to fill at buy orders above market price).
The price action was as expected, a debut at $30.11 and insta-halts for the remainder of the day, with the real action coming in after-hours, as the stock was finally released from volatility halts, with an open at $82.12 that then embarked on a massive upside run that culminated at $300.00 before pulling back to the $200 range.

Day 2 Action: The insanity continued in Day 2 pre-market with an opening rally that touched the $300.00 mark before pulling back down to the $150s, and then rallying again back up to $300.00 twice before market open.
Once regular halts came back into play, the share price went into an elevator drop from an opening price of $247.17 to a bottom of $54.11, with several insta-halts down in the process. The stock would hit a bottom of $45.00 at around 1:20 PM EST, but would then rally back up to touch $105.00 in the early minutes of after-hours trading. But that appeared to have marked the end for any upside move.

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Laser Photonics (LASE) – September 30, 2022 | 3M Shares
IPO Price: $5.00
Debut Price: $5.00
Day 1 High: $5.50
Day 1 Low: $2.50
High Since Debut: $5.50
Low Since Debut: $2.50

Day 1 Action: The LASE debut officially marked the end of the recent string of hype and hysteria that had ensured that nearly every low-float IPO that came to market was free money for allocation recipients. Before this one, the only failed IPOs were three deals with warrants involved, and of those, two of them had been scheduled on a crowded day in which two other IPOs out-shined them.
LASE came to market under intense scrutiny, in frigid market conditions, but otherwise had structured a deal that was designed with all the ingredients that we would have expected to deliver some kind of upside pop in normal market conditions. But at the end of the day, there simply wasn’t enough demand to outstrip supply for an upside move. Had the underwriter not stepped in to rescue the debut price with heavy use of the “shoe”, this one could have spelled disaster for all IPO allocation recipients.
In the IPO Warriors Live stream and Premium Discord channel, we managed to suss out the weakness of the debut in the early pre-debut indication period, where early price indications showed a heavy sell-side imbalance on price points in the mid $2 range: an absolute disaster of a debut in the making. Fortunately for most of us, as many traders had put in for large allocations that were ‘generously’ filled, the debut indication jumped in the final minute before the debut up to a break-even price of $5.00, allowing us to set limit orders that vacated our positions at or above our cost basis for a non-loss, or in some cases, a slight win.

Those who failed to recognize the ‘broken’ setup, saw their shares top out at $5.50 (1 cent below an upward halt), before dropping downward into a halt at $4.50, from where it then opened for trading down at $4.00, heading as low as $3.56 before making a climb back up to VWAP at $4.38 before failing to rally again for the remainder of the day, slowly bleeding out to hit a low of $2.56 minutes before the bell. No meaningful after hours rally would materialize.

What is “the shoe”?
This term is perhaps unfamiliar to many newer IPO traders, and is worth understanding: essentially, underwriters typically have an option to purchase up to 15% of additional shares of the stock prior to the closing of the IPO, which it generally within a few days of the stock commencing trading on the selected exchange. So in this case, Alexander Capital had an option to purchase up to 450,000 additional shares at the IPO price. It appears that they chose to purchase roughly 200k shares in the moments right before the IPO debuted, to rescue the share price and give investors an opportunity to get out of their positions without incurring a significant initial loss.
The simple reason for doing this, is that it will keep the underwriter’s clients happy, liquid, and willing to purchase shares in future offerings presented to them by these underwriters.

Day 2 Action: We’ll see if we get a Day 2 rebound rally on Monday.

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Looking forward to future IPOs next week:

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IPO Trading Review for the Week of September 5, 2022

IPO Trading Review for the Week of September 5, 2022

September 12th, 2022

The IPO market saw one debut last week that demonstrated what happens when a deal is almost entirely booked by retail flippers. It still managed to debut at a nice premium, though far short of what hopeful allocation recipients had been dreaming of the night before, and it even delivered a nice upside move on the opening volatility, showing that day traders are,or at least were, eager to jump into anything IPO related in this market. But clearly, the fever pitch that has surrounded IPOs ever since HKD ran to absurd levels in early August it getting to a point in the cycle where these setups are getting frontloaded: and that’s when a trade setup starts to get washed out.

Of course, I had said that after ONFO and JFBR failed to produce any upside value for IPO buyers, and then ATXG reset the whole cycle with a run that matched HKD’s historic ascent int a single day of trading. So there’s nothing to say that we can’t see more pyrotechnics come to market in the near future – but we can see that underlying fundamentals can be simply tossed out the window.

We are also starting to hear news of several mainstream IPOs entering the pipeline: an indication that the market may be poised for a bit of stabilization or even a turnaround – bulge bracket banks tend to coordinate large scale IPOs with upswings in the market, and the more established underwriters are likely feeling a bit of pressure to get some deals done before the end of the fiscal year.

So we should expect a healthy dose of IPOs over the next few months – there will almost certainly be some low-float IPOs that rip, but I expect that as the cycle gets played out, the more ‘normal’ ones that are taking advantage of this hysteria to dump shares on retail traders will begin to fail. I’ll be digging deep into the deal structure and hustling behind the scenes to gather as much ‘color’ as I can to best identify the potential runners, as well as which ones are best avoided, and allocating risk accordingly.

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

Yoshiharu Global (YOSH) – September 9, 2022 | 2.9M Shares +1.31M Shares Offered by Existing Shareholders
IPO Price: $4.00
Debut Price: $5.20
Day 1 High: $6.50
Day 1 Low: $3..88 (after hours)
High Since Debut: $6.50
Low Since Debut: $3.88

Day 1 Action: This deal may have actually suffered from having too much focus on it for too long, as every day trader and IPO flipper in the market had keyed in on it and gone in for relatively heavy allocations (at least, far heavier than they would have for this kind of business and this kind of IPO). With so much demand, the first thing the underwriters did that weakened the potency of this deal, at least from day-traders’ perspectives, was to add 500k shares to the float in a last-minute upsizing of the deal. At least they left the price down at the low end of the scale, as it priced at $4.00, leaving plenty of room for a debut premium.
Despite delivering the highest volume of shares traded in the opening minute of any of the low-float IPOs we’ve seen come to market since the HKD Event, with over 1.5M shares exchanged in the first minute of trading, YOSH managed to debut at $5.20: a relatively tame debut, but there was a time when making nearly 25% in an instant by dumping IPO shares at the debut was considered a nice profit.
The stock dropped slightly off the opening print, hitting as low as $4.48 in the opening minute, before rebounding into a halt at $5.42. I had suggested “laddering down” as an entry strategy on my live stream: an approach whereby you set a series of limit orders below the debut price to build better cost basis off the opening drop, in order to capture additional profits on a rebound. This would have been an ideal method of establishing a debut trade position at or below the $5.00 mark, which would have sweetened any gains taken on the ensuing reversal.
I had added to my IPO allocations on the debut, and sold out of most of my positions on the opening of the first halt up – exiting at $5.98: not a home run, but enough to close out a decent win on an IPO trade that I considered to have little downside risk as both an allocation or as a debut trade.
The stock would climb ouf of the halt to a high of $6.50, halt down wards to open and drop as low as $5.05, snap back up to $6.15, and then begin to fall-off: stepping through a series of knives down to a bottom at $4.16: still keeping its head above water for IPO buyers.
On the live trading stream, I mentioned that there was a high likelihood that this would rebound to VWAP at some point, so any bag holders should consider that opportunity as a good time to exit with minimal to no damage – by the time it did, VWAP had dropped to $5.31, and the stock managed to just barely break that mark at $5.39: still, for debut traders who picked hopped in at $5.20, they were given ample opportunity to exit with a non-loss, and savvy traders who found themselves stuck underwater, could have reduced their cost basis to realize even a small win out of what had become a losing situation.
Once it touched VWAP, the momentum died, and YOSH spent the rest of the day trailing off to a low at $4.11, before closing at $4.17, and dropping further in after hours to as low as $3.88 – a drop that saw the share price break below issue for the first time since YOSH debuted. Over 21M shares were traded on Day 1.


Day 2 Action: Day 2 is Monday.

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IPO Trading Review for the Week of August 29, 2022 – September 2, 2022

IPO Trading Review for the Week of August 29, 2022 – September 2, 2022

September 4, 2022

After a historic run of low-float IPOs boosted by an unprecedented level of hype and hysteria in the market following HKD’s insane run from a $7.80 IPO price to over $2,000 within two weeks, the IPO market appeared to have cooled off a bit, after several recent high-fliers failed to deliver the level of spectacular gains that day traders had come to expect from buying these heavily over-inflated debuts.

HPCO seemed to confirm this trend, as it opened high and proceeded to deliver a remarkable, yet very predictable, collapse off the debut, and day traders became shuffling towards the exits on low-float IPOs…

… and THEN an uplisting underwritten by a usual-suspect in the Stealth IPO game caught the day-trading world, not including IPO Warriors members, completely off-guard, and the most insane Day 1 rally of all-time re-ignited the flames of the IPO debut trade.

It appears that we’re just in the early innings of this revived hype-cycle, and as a result, we’re looking at highly probably upsides in the next string of IPOs, provided the underwriters and companies going public don’t get greedy and decide to screw day traders… unfortunately, IPOs are not created for the purpose of making ‘investors’ money: their purpose is to make money for the companies performing the IPO and the underwriters and brokers who sponsor their deals (and yes, to some degree, to the clients of the brokers who buy IPO shares, but almost certainly not the general public who buy these IPOs off the debut and trade them in the open market after they are live).

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

Hempacco (HPCO) – August 30, 2022 | 1.5M Shares
IPO Price: $6.00
Debut Price: $38.00
Day 1 High: $41.80
Day 1 Low: $7.00 (in after hours)
High Since Debut: $41.80
Low Since Debut: $7.00

Day 1 Action: With an ostensibly ultra-low float, as a Boustead deal, day traders were a bit overzealous in attacking this one on the debut: likely unaware of the 1.79M reseller shares slated to debut trading alongside the IPO shares and how those could impact trading. We had this figured out long before the debut, and I sold off my small Webull allocation (44 shares) on the opening print, and watched as its attempt to move upwards off the debut was sold off prior to a halt after touching $41.80 (though likely just missing the actual mark where it would have triggered a halt), before reversing downwards into the dreaded “halt of death” at $34.20… from there it opened at $15.01, and panic selling ensued: dropping the price down into another halt at $13.64.
It managed to stabilize from there, bouncing first up to $19.24, halting as it went, then capitulating again down to $12.82, and then traded in a range from $14 to $16 until it managed to break out to a high of $21.96 in the early afternoon, but that was all the momentum it could regain, and it spent the remainder of the day sliding down to as low as $7.00 within 15 minutes after the closing bell.

Day 2 Action: Day 2 delivered an early pre-market push to a high of $9.35, though on small volume, so not much of an opportunity there to play an overnight hold… from there it tanked off the opening bell back down to the $6-7 range, giving traders (like me) who bought in at the end of Day 1 hoping for a Day 2 rally, an agonizing bag-holding position that only got worse as the day progressed. Shortly after 1:00 PM EST, the bottom fell out, and it fell as far as $4.80… had I not been in on ATXG for what had started as a small position, but was quickly multiplying with each halt, I may have been disgusted with myself for getting caught in HPCO, if even for a small position. No meaningful rally materialized on Day 2, and it closed at $5.11

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Addentax Group (ATXG) – August 31, 2022 | 5M Shares
IPO Price: $5.00
Debut Price: uplisting: had no debut
Day 1 High: $1,999.99 (no, that’s not a typo)
Day 1 Low: $12.95
High Since Debut: $1,999.99
Low Since Debut: $8.61

Day 1 Action: I mean, I’m not even sure how to write this one up: asides from the fact that it wasn’t a traditional IPO (it was an OTC uplisting), therefore it didn’t have a typical pre-debut balancing of shares before going live with an opening trade; it was also the most insane run I’ve ever seen on the actual IPO date (and it’s not even close). It basically did what HKD did over the course of several days, and nearly 2 weeks after it’s IPO, in a single day.
ATXG appeared to have started trading at 8:51 AM EST – at least that’s when the first trades occurred: a trade for 10 shares at $350 and then 20 shares were sold at $90… and a handful of shares traded between $20-30 before the market opened (about 300 shares total up to that point). The opening trade during regular market hours printed at $27.00 and the stock began to fall through halts on very low volume for about the first 30 minutes of trading. it reached a bottom at $12.95 before volume slightly increased as it reversed through several more halts to the upside.
I was out running errands for this one right as it bottomed out, but due to the halts, was back at my desk while it was establishing the clear reversal, and took a small lotto play at $24.01.
From there it halted its way up to $32.56, but fell back down to as low as $22.50, before going back up the other way: constantly halting as it steadily climbed up through $150 to $167.35 before posting it’s biggest red candle of the day on a reversal down to $135.00 before embarking on what would become the most epic Day 1 run that I’ve ever heard of or seen: hitting a series of 3 halts from 2:36 PM EST that opened at $258.50, $374.21, and $656.54 before the stock finally traded freely in the after-hours market: where it blew through the $1,000 level and for a brief moment, touched $1,999.99 before dipping to $671.75 and then coming back up to the $1000.00 level before dropping steadily down to a low of $460. It came back a bit to finish late-hours trading at $550.20

Day 2 Action: Early pre-market traders swapped single digit trades up to the tune of $722.00 with slightly higher volume pushing it up to $894.00 nearly 2 hours later, but it lost steam heading into the opening bell: trading at $650.00 at the open, and what followed can only be described as the perfect book-end cliff-dive to the greatest Day 1 Rally in history: from a $650 open to a bottom at $22.65 and a close at $30: I mean, if you were crazy enough to try and catch the falling knife on this one, you may still be recovering from that one… and if you managed to short it at any point: you’ve done well with that trade. My take on these Stealth IPOs is that you wanna take profits earlier rather than later, and be sure to be ready to hit the eject button once you see multiple halts to the downside. Stop losses won’t save you when you get a halt from $509.14 that opens at $314.00.

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Shuttle Pharmaceuticals (SHPH) – August 31, 2022 | 1.225M Units plus 1.31M reseller shares
IPO Price: $8.125 per Unit
Debut Price: $24.05
Day 1 High: $84.70
Day 1 Low: $13.60
High Since Debut: $126.26
Low Since Debut: $11.77

Day 1 Action: This one certainly appeared to be an odd setup, when they issues paper warrants that executed immediately upon the commencement of trading: basically meaning that the IPO price of $8.125 was effectively $4.065 for each of the shares received once they began trading with a float of just 2.62M shares. The opening trade at $24.05 on just 12k shares failed to attract any day-trader hysteria, and given that at that point in the day, ATXG had only dropped from the open… the hypothesis that we were witnessing the tail end of this IPO hype-cycle was, at that point, intact. But as ATXG began climbing, SHPH seemed to catch the momentum, by 12:30 PM EST, ATXG was showing clear signs of a breakout run, and SHPH was in the right place, at the right time: running up from a baseline in the $16.00 zone up to $20 before receding slightly back down to $17.00, before reaching complete combustion at around 2:00 PM embarking on a series of upwards halts in tandem with ATXG’s upward moves, topping out Day 1 at $84.70 before halting down into the close to finish the day at $38.48. After hours initially brought a further sell-off, touching as low as $25.00, but shares quickly snapped back up to $74.00 by the 5:00 turn, and swung in a volatile range from sub-$40 to $70+ for the remaining hours.

Day 2 Action: While ATXG couldn’t muster a follow-on rally on Day 2, SHPH managed to climb throughout the pre-market session, breaking out to its ATH at $126.26 out of an upwards halt that froze trading after the first minute and opened 10 minutes later to establish the high-water mark for this ticker. it would then plummet down to a bottom at $44.30, swing back up to $75.24 and then proceed to top out at $94.09 before relenting back down to $41.00: climbing into a close at $52.40

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bioAffinity Tech (BIAF) – September 1, 2022 | 1.29M Units
IPO Price: $6.13
Debut Price: $8.40
Day 1 High: $15.55
Day 1 Low: $7.52
High Since Debut: $15.55
Low Since Debut: $6.96

Day 1 Action: This one had the fortune to be the “next IPO” after both ATXG and SHPH went on insane rallies the day before – ensuring that it was going to catch fire on the debut. It fulfilled this prophesy with three upwards halts from the opening trade at $8.40 to a high of $15.55. I was on holiday, and unplugged for the day: but had I been in this trade, the “3 halt rule” would have mandated that I sell out of the third halt upwards (and I would have been selling out of each halt on the way up).
The stock spent the rest of the day fading out through some dips and rebounds, and managed to close Day 1 at $8.30 – just $0.10 below its debut, making this an easy trade if you put in an allocation request (which likely got a full-fill), and a relatively easy trade to avoid a loss on if you bought the debut.

Day 2 Action: A steady rally in the early pre-market brought this one up from the $8 level to a pre-market high at $11.48, with momentum carrying over into regular hours with an early run to $12.82 after a quick dip on the opening bell reversed into a rally. But that would be the end of the fun, as it fell throughout the day, closing at $7.05

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IPO Trading Review for the Week of
August 22, 2022 – August 26, 2022

IPO Trading Review for the Week of August 22, 2022 – August 26, 2022

August 27, 2022

Last week was a wild ride, to say the least, with 6 IPOs including multiple stealth setups, multiple runners, and a couple bombs thrown in for good measure. Suffice to say, the IPO Summer of Stealth has been quite eventful, and highly profitable if you traded the debut play, didn’t get greedy, and avoided the bad setups.

I felt at we may have reached the top of this cycle two weeks ago, when FRZA debuted at a nearly 200% premium to the IPO price, and other low float stocks like GCT failed to breakout. Then GCT came along, and the setup looked like it was poised to deliver a massive debut, likely with a few halts up, and then a rapid reversal, which likely would have burned a considerable number of day traders that have recently flooded into these IPO trades. But then WeBull fumbled the kickoff on GCT, and the stock traded sideways and dropped, as demand was severely diminished… until WeBull got it’s act together and it’s minions of traders were able to pile into the stock at a significantly lower price than had it opened with the full support of all trading desks. What followed was a sharp move upwards on an end of day rally, followed by a massive upside move on Day 2, and the ultimate result was that the IPO debut trade picked up a second wave of momentum that carried into last week’s IPOs.

I believe that what we saw in STBX is likely what we would have seen in GCT were it not for WeBull’s failure to support the ticker when it opened for trading. Of course we will never know, but a lot of traders got bagged on STBX and JZ: chasing the halts up that were followed by a swift and dramatic reversal.
In the non-Asian IPO plays, MOB managed to produce an opening move, despite having a warrant – likely due to the continued momentum and hype that followed STBX and preceeding JZ… leading me to question whetherevery IPO, regardless of deal structure, would rip in this market. However, ONFO and JFBR confirmed that warrant deals are best avoided: and by the time it was ready to debut, we had sensed that PXMD was going to be the sneaky winner of the whole slate: with an ultra-low float, pure common stock deal with low downside, and debuted just in time to market before Friday turned into a bloody sell-off.

Ok, Let’s break these down:

Starbox (STBX) – August 23, 2022 | 5M Shares
IPO Price: $4.00
Debut Price: $27.00
Day 1 High: $46.21
Day 1 Low: $10.10
High Since Debut: $46.21
Low Since Debut: $4.91

Day 1 Action: This one sure looked like a Stealth IPO… but as soon as the pre-debut indications started being published, it was clear that no significant portion of the float was being artificially constrained. The debut at $27.00 was relatively muted compared to MEGL and then JZ later in the week, and this one was driven entirely by retail traders. That was enough to drive the opening print upwards into a halt at $29.70, which opened at $38, dipped briefly to $34.20, and then bounced upwards into a halt at $41.80. The failure to insta-halt was a good indication that we were nearing the top, bu there was clearly some gas left in the tank, as chasers popped the next open up to $42.01 and drove it up as high as $46.21 – just shy of a third halt, before it sharply reversed and fell through multiple halts to as low as $15.60 before it bounced back up to VWAP at $27.89, but from there, it trailed off to as low as $10.10 before staging an end-of-day comeback that petered out at $16.75 before closing Day 1 at $15.00. An after-market rally would yield the last ‘best-chance’ for bag-holders to salvage some portion of their losses, as it ran up as high as $19.00 at the final tick of the clock at 8:00 PM EST.

Day 2 Action: Day 2 at 4:02 AM EST was actually the top of the continuation rally from Day 1 – hitting $20.00 on 16k shares.. after that, it was essentially an extended sell-off throughout the day as it headed into single digits, closing at $9.83

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Mobilicon (MOB) – August 25, 2022 | 2.15M Units
IPO Price: $4.12
Debut Price: $4.00 for common shares : $0.62 for warrants
Day 1 High: $6.66 for common shares : $1.24 for warrants
Day 1 Low: $3.70
High Since Debut: $6.66
Low Since Debut: $3.11

Day 1 Action: IPOs that issue units (with warrants) rather than straight common shares, generally don’t do very well. In this overheated environment, even a warrant deal IPO managed to rip, though we did see the effect of having warrants involved on the upside potential.
MOB opened at $4.00, which was technically above the IPO price of $4.12 when you factor in the fact that warrants opened at $0.62 – and after a few minutes of choppy trading between $3.70 and $4.29, steadily ramped up from $3.90 to a breakout from $4.10 upwards into a halt at $4.89. It opened from the halt at $5.10 and continued upwards into a second halt at $5.16 opening at $5.82 and spiking up further to $6.43 before reversing on itself into a downward halt at $5.47 – it would trade uninterrupted from the open at $5.18, climbing back up to $6.66 before dipping briefly below $5.40 before hitting the high of the day at $6.66 on a spike along the climb up to $6.65; it established a sideways range between $5.75 and $6.50 for most of the remainder of Day 1: trending above VWAP until the turn of Power Hour, when a large sell-order came in 3:12 PM EST to effectively mark the end of the rally. It proceeded to dip into the end of Day 1 to a bottom of $5.00 with a slight recovery in the final 10 minutes to close Dat 1 at $5.47.

Day 2 Action: Day 2 would offer no real gifts to overnight holders, as it fell in pre-market and opened at $4.25 with a failed opening rally to $4.74 and an attempted rebound back to $4.55 at the 10:00 AM mark: both runs sold off quickly and by the time regular trading hours were called off for the second day, it had dropped as low as $3.11: closing at $3.30

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Jianzhi (JZ) – August 26, 2022 | 5M Shares
IPO Price: $5.00
Debut Price: $126.00 (not a typo)
Day 1 High: $186.01
Day 1 Low: $14.80
High Since Debut: $186.01
Low Since Debut: $14.80

Day 1 Action: I jumped the gun predicting the peak of this low-float insanity was at the FRZA debut leading up to what I thought would be the hammer-drop on GCT, but WeBull fumbled the kickoff on GCT, and prevented it from debuting at an absurd price, and caused it to drop into a safe entry zone before WeBull fixed its internal error and the stock soared on Day 2 – stoking the fire in the IPO engine that carried into STBX and ultimately into JZ. The original hype around JZ as AMTD’s next big IPO didn’t seem to be affected at all by the fact that AMTD was replaced by Univest and ultimately fell off the deal: perhaps due to SEC scrutiny around HKD’s insane run (or NA’s dismal debut). Anyway, JZ gave us a debut that will go down in history as the most over-inflated opening trade in recent memory: a Chinese education stock that priced at $5.00 and opened at $126.00 on roughly 14k shares. And that wasn’t even the peak: no, there were plenty of traders willing to buy it there due to the inevitable pump it would get as retail traders chased this one through two upwards halts to a peak of $186.01!
Effectively trading this was very possible: with many in the IPOWarriors premium channel buying into the debut and exiting from each of the upwards halts. While the open after the second halt yielded the highest potential returns, exits from the 3rd halt still banked profit at $160.50, but that was the end of debut trades getting the opportunity to score profits. Breaking the 3 halt rule is dangerous, and if you tempted fate beyond that, you caught pain in the form of an open from halt 4 at $112.00… there would be no bounce or reversal until it hit $55.31 and pushed up to $76 minutes later, before continuing it’s decent with the next bounce coming off $42.30 back up to $65… but these really aren’t moves that I have any idea how to forecast, and was long since out of the trade by then. The ultimate bottom came in at $14.80 around 2:00 PM EST with a 2:30 spike to $24.98 that immediately sold off, and by the end of the day, it had once again touched as low as $16.10 before slightly rising into the close to end the day at $18.38. By the time after-hours trading stopped, it was trading at just $15.00

Day 2 Action: Day 2 is Monday, and I expect that there are so many bagged traders on this one that it struggles to rally much at all.

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PaxMedica (PXMD) – August 26, 2022 | 1.545M Shares
IPO Price: $5.25
Debut Price: $6.50
Day 1 High: $10.48
Day 1 Low: $4.91
High Since Debut: $10.48
Low Since Debut: $4.21 (after hours Day 1)

Day 1 Action: Sometimes the best IPO debut trade setup is not the most obvious or most hyped play of the day -consider that the debut print on an IPO is set by the supply/demand imbalance through the pre-debut price setting process. Naturally, when there are too many eager buyers willing to pay anything at all to buy-in on the open, you get insane prices that cannot possibly be sustained beyond initial FOMO and hysteria: which is what we got with JZ.
A more comfortable debut entry, for me anyway, is one that comes to market with a low-float, has decent hype: enough to debut with a solid premium, but not so much attention that you’re getting in at an insane valuation: PXMD fit the profile perfectly, so I played this one rather heavily both in allocations and on the debut.
PXMD opened at $6.50 on healthy, but not ridiculous volume around 250k shares, and proceeded to insta-halt up to $7.15: opened at $7.66, and ran up for four more minutes into the second halt at $9.19. At this point I had taken about 30% of my position out at the open after the first halt, and another 40% out of the second halt, with the remainder sold once it breached $10.00 and failed to deliver another upside halt. $10 had been my mental target number anyway, so at that point I was ready to take profits and call it a day.
Almost in sync with the PXMD debut, the market decided to roll-over on itself, and pretty much all IPO runs were called off at that point: with PXMD getting sold-off along with the rest of the market. When the market’s in shock, day-trader rallies become one-day affairs: typically a single pop and drop: and IPOs are no exception.

Day 2 Action: Is Monday… given the trail-off, super low float, and price closing below IPO price, this one could be setup for a Day 2 early-morning spike, but doesn’t really fit the profile of a failed Day 1 debut triggering a Day 2 spike.

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Onfolio (ONFO) – August 26, 2022 | 3.13M Units
IPO Price: $5.00
Debut Price: $3.35 for common stock, $0.36 for the warrants
Day 1 High: $3.66 for common stock, $0.42 for the warrants
Day 1 Low: $2.16
High Since Debut: $3.66
Low Since Debut: $2.16

Day 1 Action: This one was garbage: no good for an allocation, and not a debut setup I had any interest in touching. I don’t really even feel like giving it much attention to even write this up, but will push myself through it out of habit and good practice.
Opened at $3.35, choppy moves in the $3.66 to $2.91 range, and then the bottom fell out to $2.33. A sinusoidal upwards climb through the early afternoon touched at high as $2.77 but eventually lost momentum into power hour and closed at $2.40 after touching as low as $2.16

Day 2 Action: Is Monday… possible Day 2 early pre-market rally given how low it’s reached, but not really interested in this name, so no interest in playing it.

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Jeff’s Brands (JFBR) – August 26, 2022 | 3.7M Units
IPO Price: $4.16
Debut Price: $3.00 for common stock, $0.36 for the warrants
Day 1 High: $3.30 for common stock, $0.50 for the warrants
Day 1 Low: $2.09
High Since Debut: $3.30
Low Since Debut: $2.09

Day 1 Action: More garbage: no good for an allocation, and not a debut setup I had any interest in touching. I don’t really even feel like giving it much attention to even write this up, but will push myself through it out of habit and good practice (see, I even borrowed that intro from ONFO – they were both trash).
Opened at $3.00, brief jump to $3.30 but otherwise down a staircase of knives to bleed out to a bottom at $2.16 before some briefly lived pushes into the $2.40 zone before hitting the ultimate bottom at $2.09 at the 3:15 PM EST mark… but then, seemingly out of nowhere, a sharp rally into the close in the final 15 minutes of trading during which 675k+ shares were traded pushed it as high as $2.75 before closing at $2.68. It settled out at $2.4x in after hours, but at least it put up a little bit of a fight there at the end.

Day 2 Action: Is Monday… if I’d been accumulating shares under the $2.20 mark, I’d probably have sold that end of day rally: I’m not gonna read too much into that, but if a strong move on Day 2 somehow materializes, that EOD run will be something I look for in future setups. .

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Recent IPO Runners:

We often see recent IPOs, especially the low-float variety, make monster runs after consolidation following their IPO. Often, these moves coincide with their 90 and 180 day lockup expiration periods (“LPX Plays”): this is a play we actively track and discuss in the weekly preview newsletter.

There was simply too much attention on STBX, JZ, and PXMD for me to care about any recent IPOs. But I do recall SVRE moving up on Monday…

SaverOne (SVRE)
Catalyst:
Contract news from previous week
Type:
IPO
IPO Date: June 3, 2022
IPO Price: $5.00
LPX Date:
September 3, 2022 (based on 90 day lockup)
LPX Period: 90 days
Historical LPX Notes: This one has never traded anywhere near the IPO price, however, the warrants inexplicably traded as high as $3.92 on the 5th day after the IPO.
Outstanding Shares: 4.64M
Close day before catalyst:
$2.61
High since catalyst: $4.78
Recap: SVRE has faced a dismal performance since it’s IPO, with a couple spikes on fleet-contracts.
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IPO Trading Review for the Week of August 15, 2022 – August 19, 2022

IPO Trading Review for the Week of August 15, 2022 – August 19, 2022

August 21, 2022

The low-float IPO debut is still locked in center stage of the day trader’s market, assisted in part by an egregious error on behalf of one of the primary trading platforms used by the new breed of traders who are being led to believe that making substantial fortunes is as simple as buying every low float IPO as soon as you can, and sitting back while it ‘squeezes’ to 3x gains.

I’ll cover the details of what happened below, but the bigger picture is that low-float IPOs should continue to get lots of attention from retail traders, though with more deals coming to the trading block: many loaded with pitfalls that should signal red-flags which are likely to be overlooked or ignored; it seems it is only a matter of time before we see a string of deals that, contrary to prevailing euphoric sentiment, fail to deliver 200% gains as expected. As sentiment becomes overly bullish, I will continue to adjust my risk accordingly and will focus on the deals that are structured according to a high conviction setup, while passing on those that fail to meet the criteria I generally associate with a winning setup.

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

Gigacloud (GCT) – August 18, 2022 | 2.9M Shares
IPO Price: $12.25
Debut Price: $19.20
Day 1 High: $21.22
Day 1 Low: $12.51
High Since Debut: $60.00
Low Since Debut: $12.51

Day 1 Action: This IPO showed how much influence a single trading platform can have on the movement of a stock price. After offering allocation requests for several weeks ahead of the IPO, WeBull succeeded in delivering minuscule allotments to its retail clients: in most cases 3-4 shares, and then proceeded to inexplicably fail to open the stock for trading when it debuted trading on the NASDAQ. The result was a muted debut at $19.20 on substantial volume of 511k shares in the opening minute, no immediate halt, and failure to break out above a high at $21.22. I sold my non-WeBull allocation on the opening print (as planned), but couldn’t help feeling aggravated by the fact that WeBull’s kickoff fumble likely stunted the debut price by a significant margin. At $19.20, I was willing to take a play on the debut anyway, but when we didn’t get an immediate run, I took my chips off the table and reduced myself to being a spectator.
As demand-side failed to push the low float upwards, sellers – and likely shorts – piled on and drove the share price down at roughly the 30 minute mark: sending it downwards into halt at $16.46, which carried over from the open to a bottom of $12.51. Relieved to have exited at a relatively healthy profit, and not wanting to look a gift-horse in the mouth, I refrained from double-dipping into the trade, despite the rather attractive setup at the baseline in the range of $12.50 to $15.00 prior to the stock opening up on WeBull.
At 2:58 EST, WeBull opened the ticker for trading, and a surge in volume drove the price up from $14.22 to a short term high of $18.32 that trailed off in the close at $15.91. After hours initially gave up further ground, as it dropped as low as $14.50, but a word spread throughout the social networks of the “next HKD” – a late-day rally ensued, sending the share price as high as $19.40 before after hours ended.

Day 2 Action: Day 2 brought the fireworks we’d expected on the debut: a setup made possible by the fact that WeBull failed to open the ticker for trading until essentially the final hour of trading on Day 1. This allowed pumpers and non-WeBull traders to establish positions: creating a solid base before the crowds could pile in. A pre-market rally to $28.78 that peaked at 7:53 AM EST pulled back to as low as $21.14 about a half hour later, but then it was off to the races.
And opening run through three halts saw the share price rocket up as high as $41.94 (had I re-entered and held for the opening run, the “Three Halt Rule” would have had me completely exited at this point), from there it reversed down through three halts to a trough of $25.31, before embarking on yet another monster rally that culminated in a top of $58.37 before consolidating at VWAP around $40.00 and making a push in the afternoon to a high of $60.00 before ultimately closing at $48.01.
After hours saw unpredictable volatility, ranging from a sell-off 30 minutes after the bell to a low of $43.00 to a recovery-rally that topped out at $56.50

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Recent IPO Runners:

We often see recent IPOs, especially the low-float variety, make monster runs after consolidation following their IPO. Often, these moves coincide with their 90 and 180 day lockup expiration periods (“LPX Plays”): this is a play we actively track and discuss in the weekly preview newsletter.

Bluewater Vaccines (BWV)
Catalyst:
Announced Plan to Explore Monkeypox Vaccine
Type:
IPO
IPO Date: February 18, 2022
IPO Price: $10.00
LPX Date:
August 18, 2022 (based on 90 day lockup)
LPX Period: 90 days
Historical LPX Notes: Recent breakout on announcement to study Alzheimer’s vaccine .
Outstanding Shares: 13.58M per Stock Analysis
Close day before vol:
$2.55
High of the Day on vol: $8.00
Recap: Called this out just the night before in last week’s Preview Newsletter as my top watch of the week: hadn’t had time to take a position yet, when the PR dropped that they were exploring a Monkeypox vaccine: I was able to jump in immediately on the initial spike up, and was well positioned for the opening run. Of course, I banked profits early (as I tend to do), but those who held on for the deeper run were tremendously rewarded with a run up to $8.00 from an initial loading zone off the PR drop at around $3.00-$3.20… given the first EPs were set at $7.00, in retrospect, I should have been able to hold with more conviction, and will bear that in mind for future LPX plays.
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Other recent IPOs on the move:

Golden Sun (GSUN): last Monday’s low: $45.00 | High: $95.00

Genius Group (GNS): Low: $5.27 | High : $11.80

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