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IPO Preview for June 7 – June 11, 2021

June 6th, 2021

I’LL BE REVIEWING THIS WEEK’S IPO LINEUP AND TRADING STRATEGIES LIVE ON BENZINGA PRE-MARKET PREP:

https://www.youtube.com/watch?v=UsW2xtzIQ8o


Before we jump into the upcoming IPOs for this week, let’s take a look at the winning trades from last week’s IPO activity…

dLocal (DLO) – debuted at $31.00 and after weathering a short dip to around $30.00, which bottomed at $29.80, smoothly rebounded to a peak of $33.50, where short term plays likely exited at or right before the $33.00 level for a $2 win (about 6%). Some trading platforms, such as WeBull had some trouble with the DLO ticker, and many traders were locked out of Day 1 trading… this may have contributed to a Day 2 rally, which topped at $36.18, rewarding high conviction traders in this stock to bank profits as high as 16%.

We’ve been seeing a trend in Day 2 and Day 3 runs and beyond on recent IPOs such as PAY, FIGS, GLBE, ZIP, and others. Always hard to pass up on instant gratification, and there is a risk of getting stuck in low-volume trades on some of these with smaller floats, but it is worth considering a partial hold into a Day 2 rally if you like the stock

Now let’s look at the IPOs ahead for the week of June 7 – June 11, 2021

Zhangmen Education (ZME) – June 8, 2021
A SoftBank backed Chinese education startup that offers online and offline tutoring services is pursing its NYSE listing despite regulator crackdowns by the Chinese Government that are threatening to limit children’s involvement in after-school education programs due to complaints of overworked students. Education is a competitive market in China, and there are a handful of larger, more established players waiting in the wings with delayed IPOs who will be watching to see how ZME performs. Additionally, if the currently reported float of just 3.62M shares holds, this could be an interesting low-float play, as we’ve seen many Chinese IPOs soar on their debut. I’ll be playing this one aggressively, though will be prepared to pare losses quickly if we don’t get an initial run upwards off the debut.

Marqeta (MQ) – June 9, 2021
Marqeta provides a technology solution for credit card issuers, adding to a list of payment providers that have IPO’d over the last few weeks. Most have done very well, giving multiple day runs, and I expect this one to follow the trend. With 123% revenue growth, cash flow positive, and net revenue retention of 200%, this is a solid growth company with a relatively fair valuation based on the IPO numbers. The only potential red flag for me is the rather high number of shares being issued at 45M, so this is not a low-float play. I may enter a half position on the debut and be prepared to double-down if we get a dip off the open. This is a strong contender for a Day 2 run.

Zeta Global Holdings (ZETA) – June 10, 2021
Zeta Global is a global digital advertising company that services large enterprise clients that has operates at breakeven while delivering 25% revenue growth. It is not perhaps as exciting as MQ, but with a relatively low float of 22.7M shares, it’s worth consideration. Perhaps wait and see if an initial dip provides the opportunity to ride a rebound.

1stDibs.com (DIBS) – June 10, 2021
This online luxury goods retailer is essentially an ecommerce marketplace for design enthusiasts and professionals. We have not seen particularly strong performances from ecommerce sites in the past few months, and DIBS is not a profitable company. The low float of just 5.75M shares may be enough to give this one a run, but if there is a lack of retail interest in this IPO, you’re very likely to get stuck in a bag-holding situation, with little volume to bail you out. I’ll be monitoring social media to gauge retail interest, and will approach this one with caution.

monday.com (MNDY) – June 10, 2021
Anyone who works on projects with a range of clients has probably been exposed to monday.com and have used its cloud-based project management system (which they see as more of a ‘Work OS’ upon which companies can build their own task management solutions). As more companies move to remote working, platforms such as monday.com and competitor Asana (ASAN) have become necessary professional tools. Revenue growth has been solid, at 106% for 2020 vs 2019, but they are not profitable.
Recently we saw ASAN, which direct listed back in September 2020 rise from a debut at $27 to a current trading price of $40… but not without a dip off the debut. With a target price range of $125-140, MNDY seems to be priced at a point where many retail traders will be scared off, and it leaves much room to fall… but the very low float of just 3.7M shares makes this an interesting play but I’m always weary of IPOs that debut with high price tags, regardless of the valuation.

LifeStance Health Group (LFST) – June 10, 2021
LFST provides mental health services through an online platform and has demonstrated steady growth combined with operating profits. Revenue increased 95% in the 3 months ending March 31, 2021 to $143M, and was up 77% year over year from 2019 to 2020. With 40M shares being offered, this one is not going to provide any low-float squeeze, but may attract enough attention to be worth a play given the focus on mental health products in the US.

TaskUs (TASK) – June 11, 2021
TaskUs provides digital outsourcing solutions for large corporations. The company is profitable, but margins are fading while operating profit and net income are increasing. Revenue is up 33% from 2019 to 2020. The float is just 13.2M shares, so this could be an interesting play, but after a long week of IPOs, and a Friday listing, I might end up taking a smaller play on this one, if at all.

*** Watch The IPO Warrior Live ***

I’LL BE REVIEWING THIS WEEK’S IPO LINEUP AND TRADING STRATEGIES LIVE ON BENZINGA PRE-MARKET PREP:

https://www.youtube.com/watch?v=UsW2xtzIQ8o

Reminder: this is not financial advice, it is informational only, and I am not a financial adviser. Your trades are your own to make. Good Luck!

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