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IPO Preview for May 17-21, 2021

May 16th, 2021

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

– MONDAY, MAY 17, 2021 at 9:00 AM EST: –
https://youtu.be/7w7tXYOao5A


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…

iPower (IPW) debuted at $5.66, and after few minutes of finding it’s balance, spiked up through two halts to a peak of $7.30. The trading strategy on this one was pretty straightforward, depending on how much conviction you had in the play. Though it didn’t halt upwards immediately, as one might have expected for a low-float play with a sound company behind it, selling at least half your position out of the first halt would have been a smart move. If you did hold any shares out of the first halt, then selling most, if not all of your shares out of the second halt would be logical. Once it failed to run beyond the second halt, a stop-loss for any remaining shares just below VWAP would have been prudent, or at the very least, at the entry point of $5.66 to ensure a profitable trade would have been smart. Absolutely no reason to have taken a loss on this one.

Global-E (GLBE) debuted at $24.25 and pretty much steadily traded upwards into a peak on Day 2 at $27.40. If you had high conviction in this stock, you simply held into Day 2 and took your exit with a stop loss once it spiked into the $26.50-$27.00 range. A lower conviction trade likely would played the initial spike in the opening 10 minutes and been stopped out at around $25.00-$25.25

E-Home Household Service Holdings (EJH)… ok, so this one wasn’t on the IPO calendar, and only appeared on the day of the IPO itself, so forgive me for missing it. In the future, however, I won’t be sleeping on these “Stealth IPOs”. Like WNW, UTME, and TIRX, EJH went on a parabolic 300% tear off its debut at $16.60; peaking at $67.85, and looks poised to continue upwards on Monday. I sent out a newsletter yesterday explaining my theory behind the Stealth IPO, so I’m not gonna dig deeper here, but keep your eyes on your inbox in the future, as I’ll be jumping into the next low-float, last-minute, Chinese IPO with both feet.

Ok, Now let’s look at the IPOs ahead for the week of May 17-21, 2021


SquareSpace (SQSP) – May 19. 2021
Squarespace is a hosted website builder platform, similar to Wix.com, so we can reference Wix as a suitable comp. The curve ball here, is that SQSP will debut as a direct listing with a total of 40.4M shares being offered. Since we don’t really know how many shares are actually going to be sold by current shareholders, it’s a bit difficult to size this up… will it steadily go up like RBLX or tank after an initial run like COIN? WIX, with a market cap of $12.5B and 55M shares out, currently trades at $222
I can’t imagine wanting to buy SQSP at a comparable price, and WIX just tanked last week from around $300 to its current price, so the market may not be all that strong for what is essentially ‘another Wix”.
I may take a flier on this one, as it is rather unpredictable as a direct listing.

Procore Technologies (PCOR) – May 20, 2021
Procore is a leading provider of cloud-based construction management software, and is used by over 1.6M users in 125 countries. Construction is booming globally, and Procore is well positioned to expand its reach in this industry. Revenue growth increased 23% in Q1 2021 compared to Q1 2020, despite Covid impacts (which incidentally, delayed the IPO from February 2020 to now). With a somewhat small float of just 9.47M shares, and strong institutional backing, I like this one and will be playing it with a standard buy-in, likely letting it run into Day 2 unless market conditions are as bad as they were last week.

Oatly (OTLY) – May 20, 2021
The leading producer of oat-based milk, Oatly is well positioned to capitalize on general trend of plant-based alternative foods. Similar to BYND, which skyrocketed off it’s IPO debut, OTLY should attract plenty of retail traders, and is worth playing despite its high IPO valuation at roughly $10B and large float of 84M shares. The valuation and float do give me some pause, so I’ll be measuring my position on media buzz and social media chatter to determine the extent to which I enter my position. Still, a logical Day 2 runner.

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

– MONDAY, MAY 17, 2021 at 9:00 AM EST: –
https://youtu.be/7w7tXYOao5A

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Disclaimer: The information contained in this newsletter is not meant to be financial advice. It is meant ONLY for informational purposes and you’d be wise to only trade IPOs with money you very well could lose. I mean, realistically, I’ve never heard of a company going bankrupt on the day of it’s IPO, so it’s very unlikely that you could lose ALL your money on a short-term trade on an IPO, but this is a crazy time we live in, so always expect the worse and hope for the best. On that note: Trade your own trades, and good luck!

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