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IPO Preview for May 10-14, 2021

May 9th, 2021

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

Alfi, Inc (ALF) debuted under a bit of confusion, as platforms such as WeBull seemed to get mixed up between the stock ticker – ALF, and the warrants (ALFIW) … at one point showing the price movement under the ticker AFLIW, and then completely failing to show price action from 1:09 PM to the market close. Along with a generally red market, ALF debuted below the IPO price of $4.15 to open at $3.75, though when you consider the value of the warrants that were issued to buyers of the IPO ($0.45), the debut price was actually priced slightly higher than the cost of the IPO… yeah, a little confusing. Anyway, the market took a day to figure things out, before ALF jumped as high as $5.99 in pre-market on Day 3. So if you held your position from the debut, you had an opportunity to take solid profit.

The Honest Company (HNST) debuted at $21.22 and quickly rose to a high of $23.88 before settling down as low as $21.50 before making an end-of-day run to close at $23.00, and looked poised to make a Day 2 run. The second day run was short lived, however, as momentum disappeared at a peak of $23.63 just minutes into the opening, and HNST followed the rest of the market’s downward trend to slump into the close and could not regain any bounce through the remainder of the week. Still, this stock made for easy profit taking for those who either picked off an exit at a 10% price target ($32.34), and more modest profits were taken by any traders who locked in wins with stop losses above their entry points.

Waterdrop (WDH) provided a straightforward profitable play with a debut at $10.25 that climbed after stabilizing in the opening minute to a peak of $11.77 over the opening 15-20 minutes of trading…making for an easy exit with a 10% price target, or stop loss set in the $11.00 range. This was not one to hold beyond the initial spike, and while it did not offer a huge win potential, it did offer profits from relatively simple trading strategies.

Ok, Now let’s look at the IPOs ahead for the week of May 10-14, 2021

Flora Growth Corporation (FLGC) – May 11, 2021
Tuesday brings us two low-float IPOs that have been rescheduled from earlier planned IPO dates. The first one being FLGC: a small weed growing company with no revenue to report, and limited financial history. The main points on this one are that it’s a ‘weed stock’ with a low float (just 3.3M shares). Weed stocks have been hit pretty hard recently, so it’s hard to know what will happen with this one, and it’s a WeBull offering as well. So a good strategy is to pay attention to how much allocation gets filled for retail IPO allocation requests to determine demand. That along with a premium in the indication price before shares start trading should give you an idea as to whether there’s any demand for this. If allocations are small, and the indication prices at a premium above the IPO price, this could run. If not, you might want to take a pass on this one.

Transcode Therapeutics (RNAZ) – May 11, 2021
We’ve covered this one for the past two weeks as well, since it keeps getting rescheduled. A pre-clinical oncology biotech with just 2.77M shares being offered, this one is also a WeBull IPO offering, so apply the same strategy as FLGC and play it with caution.

Similarweb (SWMB) – May 12, 2021
Similarweb is a SaaS website analytics and comparison tool for internet marketers, and has been demonstrating steady growth but like most tech startups, is unprofitable. The recent success of rival SEMRush (SEMR) bodes well for SWMB, though it should be noted that SEMR took about a week after its debut on March 25, 2021 before it ran up from it’s debut price and has doubled since then. SWMB is worth a look, but may not get immediate public demand, so be prepared to bag hold this if it doesn’t pop right away.

Global-E Online (GLBE) – May 12, 2021
Global-E provides an international cross-border ecommerce platform. It operates in a pretty competitive market, but has recently achieved profitability and has demonstrated rapid growth. While other ecommerce platforms such as BIGC offered substantial boosts off their IPO debut, and there are some comparisons to Shopify, Global-E may not attract the level of retail demand as others. Still GLBE is worth keeping an eye on, and if the stock debuts trading at a small or reasonable premium above the IPO price, this may be worth playing.

iPower (IPW) – May 12, 2021
iPower was scheduled to IPO last week, but due to weak market conditions, decided to postpone to this week. This hydroponic equipment retailer has generated rapid growth in revenue and profits through its website and third-party ecommerce platforms. With a relatively low float of just 5M shares, IPW appears poised to potentially make a run off the debut.

Enact Holdings (ACT) – May 13, 2021
Genworth Holdings has decided to spin-off it’s mortgage division under the newly branded “Enact Holdings”, and is going public under the ticker ACT after failing to complete an acquisition by China Oceanside that fell apart after over 4 years of negotiations couldn’t complete a deal. I don’t see much retail interest in this one, and other mortgage plays, such as RKT are currently hitting all-time-lows, so I’m not to excited about this one.

Zenvia (ZENV) – May 14, 2021
This Brazilian company claims to “increase customer satisfaction rates with efficient communication”, and as I understand it, provides a platform for Brazilian companies to engage with customers via SMS and social media platforms. While this sounds a bit like HubSpot for Brazil, I’m always a little bit hesitant to play IPOs for foreign companies, where US retail investors likely are unfamiliar with the brand.

hear.com (HCG) – May 14, 2021
hear.com provides online hearing care products and services, and has demonstrated impressive growth over the past year, but they are not profitable, and there’s a ton of competition in this space. I’m always a bit hesitant to play IPOs on Friday, and would need to get some indication of strong retail interest before I would decide to take a large position on this one. Not particularly compelling, and this is not a high conviction play for me, so I may just pass.

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