Recap of Last Week: Last week we had a full slate of IPOs, headlined by a blockbuster direct listing by crypto trading platform Coinbase (COIN). While COIN did offer a rather comfortable +10% win opportunity on the initial debut, the biggest profit maker was EBET, which was called out last week in this newsletter: delivering a monster 340% profit opportunity from it’s debut at $21.00 to it’s Day 2 pre-market peak of $71.49.
‘But wait, didn’t COIN drop hard on the IPO?”
While COIN did debut at $381.00 and ended the day down about -15% at $324.32, it did post essentially 10 consecutive green 1-minute candles off the open, giving amble opportunity to set a trailing stop loss, or raising a hard stop loss order behind the rising share price, for a reasonable exit in the $420-$425 range. Consider taking out at least half your position on this initial spike, using the trailing stop-loss strategy to lock in profits on a meaningful portion of your position. Being +$30 on half your sale means you only need to sell the other half at or above -$30 ($351) to break even or profit on the overall trade. A much better position to be in if you’re stuck bag holding a position in COIN at this point.
Oh yeah, and that EBET play – look out for low-float IPOs in the upcoming weeks, as social media groups have keyed in on this factor for their high-profit potential, and this will create great win opportunities under the right conditions.
OK, so enough about the past… let’s look forward to what’s on deck for this week:
Troika Media Group (TRKA): April 20, 2021
https://www.thetmgrp.com/
Troika Media Group is a digital marketing firm with offices in Los Angeles, New York, and London. They boast an impressive collection of A-List clients including Coca-Cola, Netflix, Amazon, Pelaton, Tiffany Co, HBO, ESPN, and many more highly recognized brands. They are profitable, but revenue slipped in 2020 amidst Covid conditions, and they appear to essentially be a service company, so the prospects for exponential growth seem limited. However, none of that really matters compared to the fact that they are debuting this IPO with just 3.3M shares, and while this has been available on WeBull (via ClickIPO) for well over a week, there may be enough hype and interest in the UTME/EBET phenomenon to warrant a play. Beware though, as ClickIPO offerings also have the tendency to sell-off right from the debut. I will be setting a stop loss immediately if TRKA doesn’t trade right up into a halt, I’ll be setting a stop loss to protect against a swift drop-off.
InfoBird Co (IFBD): April 20, 2021
http://english.infobird.com/
Infobird is another low-float IPO that has been available on ClickIPO for over a week now, as the debut was pushed back from last week. With a higher volume of shares being offered than other low-float plays, with 6.25M shares, this one could be a little more risky. However, it does offer better financials, and a proven CEO who was formerly an executive at HP, and it also has the added benefit of being a ‘Chinese IPO’ – some of which have made stratospheric runs on their debuts despite larger floats (ex: TIRX, RLX, and RAAS). Worth playing, but again, keep that stop loss tight off the debut, and if you don’t get upward halts, get out quickly.
UIPath (PATH): April 21, 2021
https://www.uipath.com/
Ok, so now we take a break from the purely low-float plays, and get to some more established companies. Leading the charge is UIPath with a 21.3M float – which is still rather modest for a company of this size and growth numbers. PATH specializes in robotic process automation software: which has nothing to do with clunky metalic robots, but instead reference software ‘bots’ that automate processes for customers like banks, insurance companies, and well, any kind of office process. PATH boasts solid financials and growth metrics, and has recently upgraded its executive team to help lead it into a more mature expansion and growth phase. The company nearly doubled YoY Revenue (+89%) from 2019-2020 and Net Margins rose from -155% to -15% in 2020. Interestingly, their IPO valuation is LOWER than their last funding round, but that may just indicate a great opportunity to buy a strong growth company at an attractive price. Also of note, ETrade offered customers the opportunity to submit allocation requests for PATH: historically, ETrade has pulled these opportunities on the day of the IPO for well performing IPOs, and those that were not pulled (OSCR, DOCN, and APP) have priced above their debut price. I submitted a request, so if I get an allocation, I’ll play that and not play the debut. If I don’t get an allocation, that’s a good sign, and I’ll play the debut. Beyond that, I may decide to take my profit in held shares… a strategy by which you exit your position for a win, but rather than sell your entire holding, just sell enough shares to cover your initial buy-in total: in effect, gaining a position of remaining shares at no cost.
NeuroPace (NPCE): April 21, 2021
https://www.neuropace.com/
Neuropace is a commercial stage medical device for treating epilepsy, with a relatively low float that makes this an interesting IPO. It does offer growing revenue and reduced Net Income Loss, but it’s financials are otherwise not all that impressive. Like any Low Float play, proceed with caution. The share price could dramatically drop if demand doesn’t show up, so set your stop loss tight on the debut, and be willing to accept a non-win or small loss if the day traders don’t spike this into an initial halt.
SkyWater Tech (SKYT): April 21, 2021
https://www.skywatertechnology.com/
No, this is not a bottled water-company, rather, a US Department of Defense funded semiconductor foundry that produces microchips for the aerospace, automotive, bio-health, and other industries. Given the global chip shortage, and the Biden administration’s emphasis on promoting the US’s manufacturing capacity of chips, this stock is in a prime position for growth and expansion. With just 5.8M shares being floated, this is worth a play.
DoubleVerify (DV): April 21, 2021
https://doubleverify.com/
DoubleVerify provides digital marketing monitoring and analytics for connected TV and video ads, making sure that ad metrics are not fraudulent, that ads are viewable, and delivered to the right target audience. They provide ad rating, predictive ad performance, and programmatic ad enhancement services to digital advertisers. So yeah, that’s a lot of hype words to basically say that DV helps advertisers make sure their digital marketing budgets are optimized and effective. Furthermore, they are profitable and cash-flow positive, and are coming to market with the backing of Goldman Sachs and 11 other underwriters with a relatively low float for such an established company with just 13.3M shares.
KownB4 (KNBE): April 22, 2021
https://www.knowbe4.com/
With a name that sounds more like a K-Pop band than a cybersecurity company, KnowB4 offers clients a SaaS platform that trains employees to recognize cybersecurity attacks such as phishing scams. Of course, cybersecurity is a hot and growing market, but the software this company offers sounds a bit more like an over-built corporate training session or memo reminding employees to never send out their passwords than a game changing technology platform. $11.8M share float, so not small enough to garner day-trader attention, and given the other offerings on the same day, I’m gonna take a hard pass on this one.
Zymergen (ZY): April 22, 2021
https://www.zymergen.com/
Zymergen’s business is as cool as the name implies, as they create futuristic materials by engineering microbes and molecules found in nature using machine learning and artificial intelligence. Their initial products inlcude bio-based films that allow for foldable electronic displays, nano-thin coatings that provide advanced water proofing capabilities, and a safer, more effective mosquito repellent. Funded by Softbank, and listing Goldman and JP Morgan as two of the underwriters running this IPO, the relatively low float of 13.6M shares combined with their futuristic offerings make this an interesting IPO to play, or possibly to watch in order to buy a dip for a long term hold.
Latham Group (SWIM): April 23, 2021
https://www.lathampool.com/
As the largest designer and manufacturer of in-ground swimming pools in North America, Australia, and New Zealand, this company is highly profitable and claims the #1 market share in every product category where it competes. 2020 saw a significant uptick in pool installations, as Covid lockdowns and low interest rates motivated many homeowners to install swimming pools in their own backyards. A comparable IPO can be seen in LESL at the end of last October, which debuted at $21 and has since grown to $26.37. So if you don’t get a day 1 pop, you’re still likely in a solid position to exit for a non-loss or win if you can afford to hold.
Agiliti Health (AGTI): April 23, 2021
https://www.agilitihealth.com/
Agiliti Health provides a medical equipment management, rental, and maintenance service to over 7,000 hospitals, network providers, and medical care providers. This company has been around since 1939, and just two years ago, merged with a SPAC but elected NOT to go public (they de-listed the SPAC). They are now going public at a higher valuation than the SPAC valuatio with a 26.3M share float. I’m sure that servicing medical equipment is a sound and stable business, but given the SPAC association and lack of anything truly exciting about this offering, I’m gonna sit this one out and focus on the other opportunities this week.
REMINDER: Catch me on Benzinga TV on Monday April 19, 2021 at 9:00 AM EST where I review and discuss these IPOs and IPO trading strategy every week:
https://www.youtube.com/watch?v=qomP96jeg98
The information in this email and all IPOWarriors.com correspondence, including on the IPOWarriors.com website and social media accounts is meant for informational purposes and is NOT intended as financial advice. Of course, you can lose money in the stock market, you can also lose money in your couch, or if you have a hole in your pocket. There are lots of ways you can lose money, and investing in ANYTHING, can result in financial loss. Playing IPOs can be very risky, and you really shouldn’t be ‘investing’ (if you can even call it that) with money you can’t afford to lose. Educate yourself, trade your own trade, and we wish you the best of luck in manifesting profits.
