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IPO Preview for June 21 – June 25, 2021

June 21th, 2021

In case you missed it this morning, you can watch me review this week’s IPOs on Benzinga Pre-Market Prep https://www.youtube.com/watch?v=uFdtvNSBqO8

(skip to the 1:04:00 mark)

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…

Alzamend Neuro (ALZN) – yeah, we got hit with a ‘Stealth IPO’ last Tuesday that I didn’t pick up in time to do more than Tweet about before it debuted. Fortunately, it wasn’t much of a win opportunity, as it opened at $29 after pricing at $5, and halted up twice: offering opening outs at $30.50 on the way up out of the first halt, and $30.50 on the way back down out of the second halt, with a top of $33.55. If you held any longer than that, you were in a world of hurt, as it halted down again before ultimately reaching a bottom at $11.00. It now trades at $8.12
Basically, you didn’t want to touch this one (I got in at $29.00 and out at $30.50).


WalkMe (WKME) – … more like FKME – this one debuted at $31.25 and prety much tanked the whole day. I ended up passing on the open, setting a limit order down at $29.05, and forgetting that I set the order. It filled on an instantaneous drop at 12:42 EST, and immediately recovered to $29.96 – I got out right away for an ‘accidental win’… anyway, WKME still hasn’t recovered to its debut price, but is currently sitting at $30.00, so bag holders can still be hopeful for an out.

Molecular Partners (MOLN) – not a fun play, and not a huge win potential: but bag holders who bought the debut at $20.00 were given an out as high as $21.50 in after hours on Day 1, and plenty of opportunities to get out on Day 2 above $20.00 – so not so much a financial pain as a boring trade overall.

Convey Holdings (CNVY) – was clearly not going to produce much demand when it debuted at $14.00, even with the IPO price, on a day with general market weakness. I passed on it, and hope you did too. Now at $11.73, this one is not looking like a strong player, and serves as a further warning against playing healthcare management plays (see BHG this week).

Lyell Immunopharma (LYEL) – it took only 2 minutes for LYEL to demonstrate why I generally avoid biotech plays, as it debuted at $18.75 and proceeded to nosedive down to $16.26.. it never recovered and has traded basically sideways since then.

Angel Oak Mortgage (AOMR) – sleepy as expcted: opened at $18.75, closed at $18.65, currently at $18.15 with a high of $18.94 and a low of $17.11. No reason to bother with this one.

iSpecimen (ISPC) – I got spooked out of this one when it priced the IPO at $8 and debuted down at $6.27. In retrospect, with such a low float and retail allocations made through WeBull and ClickIPO, the low debut all but ensured that IPO share holders wouldn’t be likely to sell for an immediate loss. ISPC ended up peaking at $8.00 on Day 2, for what would have been one of the few significant wins of the week.

Atai Life Sciences (ATAI) – was not the blockbuster I was hoping for, and after taking a significant position on the debut at $21.00 and greedily passing on the opportunity to lock in a quick win at the $22.80 area, I was left to sweat it out for a full day as the stock dropped hard and fast to a bottom of $16.50 before recovering into a peak of $21.88 on Day 2. I made it out at $21.50 and was happy enough to get out without a loss.

AnHuiShou (RERE) – In short: This one hurt. After a string of strong Chinese IPOs, I was expecting more from this innovative company, and was punished for putting faith in retail interest in consumer electronics recycling at scale. RERE opened at $18.28 and spent the first 8 minutes in freefall, before performing a dead-cat-bounce off a stair back up to $16.90 before reaching bottom at $16.00 even. It deceptively looked like it wanted to rally at the end of Day 1, reaching as high as $17.74 before receding into the close at $17.21: enough of a run to give hope to bag holders like me. Day 2 was almost a repeat of Day 1, with an opening drop down to $13.64 and a closing recovery to $14.52. It’s been a while since I’ve taken a beating like this one, and am only in for half a position, but willing to give this one a few days to see if it can recover… maybe more.

Codex DNA (DNAY) – delivered yet another opening dip from a debut at $20.00 to a bottom at the 3 minute mark of $17.13, but was polite enough to recover rather quickly to a high of $20.42. The stock quickly came back to the sub-$20 level and spend most of the day teasing bag holders with runs that managed to breach the $20 level momentarily but no sustained breakouts. I managed to get out with a standing Limit Order at $20.80 on a seemingly random 3 minute run to $21.75 with 30 minutes of trading left in Day 1. DNAY continues to be range bound in the $19.50 – $20.00 level, so bag holders may still have a chance to get out without losing money.

Verve Therapeutics (VERV) – well, I said that VERV might entice me to break my anti-biotech rule, and it nearly did, but having watched the ill-fated performance of the other IPOs earlier in the day, I pulled my order about 5 minutes before the debut… and of course, it ran from an open at $30.00 to an immediate peak of $33.96 for what could have been an easy 10% win. Just to rub salt in my wounds, VERV pulled a Day 2 rally as high as $39.84 and reached $41.77 in after-market trading on Day 2. Not gonna sweat it too badly, but this was the clear winner of the week.

Cyteir Therapeutics (CYT) – another biotech that had me watching from the sidelines as it ran from a debut price of $16.50 to a high of $18.78 within 6 minutes of the open. It then faded out to a low of $16.00 and closed at $17.06 for what would have been a rather painless trade even if you bag held through the peak and trough. Day 2 had pithy volume and a trading range from $16.62 to $17.90, so nothing too exciting, but still, no real loss potential for anyone who traded this.

Ambryx Biopharma (AMAM) – was not very compelling to begin with, and after opening at $17.50, dipped to $17.01 before rebounding to $18.00 and then dropping off to $15.00 it recovered to $17.40 and offered a final out at $17.80 in the closing minutes, but not worth spending a whole day trying to skim a trade on. Day 2 saw thin volume and a general decay to a close of $16.23. Now THIS is why I don’t like to play biotech IPOs

Femasys (FEMY) – was not on the calendar at the start of last week, and was not a very strong IPO, debuting at $13.08, making a slow run up to $13.75, and continuing to jog at a sluggish pace before falling off a cliff at around 2:40 PM, and has never since recovered. Currently at $10.85, this is another reason why pre-clinical biotechs are not worth the effort or risk.

Ok, so last week was pretty lame. Nothing highly predictable, a relatively cold market, and the few wins I made took a lot of effort (and my bag-holding position on RERE threatens to wipe them out.)

So I’m hoping we get a bit more action this week:

Full Truck Alliance (YMM) – June 22, 2021
Billed as the “Uber for Freight” – this company is essentially a shipping company for commercial freight services that links shippers directly to truckers, and is based in the manufacturing powerhouse of China. They offer a subscription service along with single use services, and delivered over 22M orders in Q1 2021. On top of a lack of profitability, and growing net losses, they face stiff competition from Didi Chuxing – China’s leading rideshare company (which is profitable, and planning a US IPO for next month). I might still like YMM, were it not for the super large float of 82.5M shares. I’ll be watching this one closely, but in my experience, the large float kills the ability to sustain a run off the debut, so I likely will watch and take notes rather than play YMM off the debut.

Sprinklr (CXM) – June 23, 2021
Sprinklr provides a software platform for monitoring marketing spend, managing customer relationships, and provides services to help companies manage their digital marketing and customer engagement strategies. The company has swung between being cashflow positive to negative in the most recent quarter, but does claim growing margins and boasts 50% of the Fortune 100 companies as clients. With a modest float of just 19M shares, this is an interesting IPO worth a conservative play, though this depends on the debut pricing. ETrade is also offering this for allocation request, so if I get an allocation, it probably means demand is not that great. (Yeah, it’s the retail allocation paradox: if I get an allocation, I probably don’t want it… and if I don’t then I should buy the debut.)

First Advantage (FA) – June 23, 2021
First Advantage provides background checks for employers, along with a suite software providing HR solutions to enterprise clients with a global presence. While their website is incredibly not impressive, they do boast profitability and are cashflow positive. The float is relatively low, with just 21.3M shares, so this might be one to play if the debut price isn’t too high.

Bright Health Group (BHG) – June 24, 2021
Thursday’s lineup is pretty packed, with 6 IPOs scheduled, so the prospect of playing another healthcare management service IPO is not very compelling to me. The 60M share float makes it even less appealing, and I see very little chance of regretting not having played this one.
Next…

Doximity (DOCS) – June 24, 2021
Doximity provides a mobile app that provides a collaboration and telemedicine platform that doctors to each other and directly to their patients. It’s an interesting play for a few reason: primarily, that it’s growing rapidly and already profitable, another is that the float is just 23.3M shares, and another: that doctors who use it and understand it’s value as a service are likely to be interested in buying shares once they catch the overnight media cycle between Day 1 and Day 2 after the debut.

Confluent (CFLT) – June 24, 2021
A year ago, this one would have been an easy read: data infrastructure that allows clients to build real-time data streaming into their apps. While not direct competitors, these were the same buzzwords that sent Snowflake, Palantir, Alteryx, and other data management companies to sky-high valuations in 2020. With growing revenue and gross profits, the only key missing piece is operating profits: as they have posted high operating losses. But the runaway market for all things ‘data management’ has cooled off in the past several months, and we’ll need to gauge whether CFLT debuts with the kind of insane premiums on top of the IPO price that we saw in last year’s tech IPOs. As much as this one excites me on the surface, I’d need to see an IPO price that’s above range, with a debut price that’s reasonable for me to feel confident that substantial demand will be able to boost the price off the debut. Given the market conditions last week, we might just get a reasonable entry point worth playing this.

Unicycive Therapeutics (UNCY) – June 24, 2021
Cutting and pasting from last week with updates.
This biotech focuses on kidney disease and repair, and despite an ultra-low float of just 2.63M shares, is likely a pass for me, given the generally poor performance of Roth Capital underwritten IPOs. Last week’s performance of FEMY gave a good example of what is typical for low-float pre-clinical biotechs, and unless day traders start hyping UNCY, it is a likely ‘pass’ from me. Undecided at this point, but likely will be on the sidelines and taking notes.

Soulgate (SSR) – June 24, 2021
A Chinese social app, with immense growth and backing from Tencent, Soulgate is a popular mobile app that provides a ‘social playground’ where users interact around games, messaging, content sharing, and dating in a virtual universe. With 644% YoY revenue growth from 2019 to 2020, and 544% gross profit gains over the same time frame, Soulgate clearly benefited from Covid lockdowns, and still posts a rather substantial operating profit loss… but the low float of just 13.2M shares, and the strength of many Chinese IPOs makes me feel like this is one worth playing.

Miromatrix Medical (MIRO) – June 24, 2021
MIRO provides an example of an early-stage biotech that is enticing simply because what it promises to deliver is so compelling: bio-engineered, fully-transplantable human organs: starting with livers and kidneys. I mean, how awesome would that be? Lab-grown organs that are fully compatible with the host recipient! Dude, this company’s gonna make billions!
But hold on, before you get too excited, they are still in the very early stages of trials for even just tissue based solutions, starting with their External Liver Assist candidate not slated to enter Phase I trials until late 2022. So this company is a long way from profitability, and likely will end up raising additional funds (dilution) before they develop a commercial product. Still, a low float of just 4M shares makes this worth keeping an eye on, but I’m not sure how much retail demand will show up for this one.

Mister Car Wash (MCW) – June 25
Alright! A recognizable brand name IPO, at least, I think I recognize this brand… anyway, as the largest carwash chain in America, MCW operates over 344 locations in 21 states, with a subscription model that has generated substantial profits and solid cash flow. 37.5M shares is a standard float for a large, profitable company, and hopefully, the brand recognition gives MCW the boost we’re looking for in an IPO debut play. I’ll get in on this as long as the market is showing strength throughout the week and we don’t get an unattractive debut price.

Acurx Pharmaceuticals (ACXP) – June 25, 2021
This one was also rescheduled from last week, and while it is a low-float biotech, there may just been enough interest in this one to make it worth playing. For one, it has created a new class of antibiotics for infections that have been prioritized by the WHO, and has received FDA ‘fast track’ designation for it’s leading drug candidate, which is currently in Phase II trials. Another notable characteristic of this IPO is the underwriter: Network 1 Financial, who has produced some of the most ridiculous low-float runners in recent history: including TIRX and AUVI
I’m not really sure what to make of this one, except that I’ll definitely be watching with my ears to the ground to see if this one catches any buzz on social media. Wouldn’t take much to send this one into a few quick upwards halts.

AMTD Digital (HKD) – June 25, 2021
Another IPO that was re-scheduled from last week, HKD is the spinoff of AMTD’s digital banking branch: which has demonstrated a knack for securing rare digital banking licenses in Asia: with Hong Kong already under their belt, and applications for Malaysia and Singapore pending. HKD will debut with a relatively limited float of just 16M shares, which makes this a compelling play in the fintech industry. If I’m not completely exhausted from a full week of trading, I’ll be playing this one with a half-position.

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NOTE: I am not a financial advisor, and this is not financial advice. It’s just information. I am also not a professional basketball player, nor am I a professional basketball coach, but for some reason, I don’t have to disclose that when I point out to some kid that his feet aren’t lined up to the basket when he’s shooting the ball. These disclaimers are a bit absurd. Of course, I’m sure they’re necessary: some loser probably lost a bunch of money following the ‘information’ provided by someone online, or in a newspaper, or magazine, or whatever, and then successfully sued the author for giving bad advice. How insane. Anyway, best of luck, don’t blame me if you lose money trading, and on that note, no one seems to really thank me for helping them make money either. Oh well. Good luck out there.

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