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IPO Trading Review for the Week of April 11, 2022 – April 15, 2022

April 16, 2022

Despite weakness in the overall market, we still had 3 IPOs debut last week, including a rare mainstream IPO opening at a robust price. For the most part, we got what we had expected in each of the debuts, despite issues with many trading platforms mishandling the ticker symbols on the opening day of trading for a couple of these.

Generally speaking, when one or more major trading platforms fumbles the handling of a new ticker symbol on an IPO, I take that as a sign to stay away from a debut buy-in, simply because it stands to reason that demand will be reduced. There are exceptions: particularly if I feel that a Stealth IPO is in the works (as we saw last week).

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Catch me live at 12:00 PM EST (noon) on Benzinga Live to review last week’s winning IPO trade and preview the IPO Calendar for the week ahead.

Watch my Twitter feed for the link:
https://twitter.com/WarriorIpo

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Ok, Let’s take a look at what happened last week in IPO Land:

Genius Group (GNS) – April 12, 2022 | 3.27M Shares
IPO Price: $6.00
Debut Price: $15.11
Day 1 High: $36.55
Day 1 Low: $13.08
High Since Debut: $36.55
Low Since Debut: $6.60

Day 1 Action: As expected, this turned out to be a ‘Stealth IPO’ – and fortunately, it didn’t debut at an absurd premium (relatively speaking). After pricing at $6.00 per share, this one opened up for trading at $15.11, giving retail traders an opportunity to get in before it went on its hectic run of halts up to a high of $36.55.
Unfortunately, for me anyway, I underbid the debut, as it was an AMEX listing where I was unable to get an accurate pre-debut price indication. In reality, it wouldn’t have been possible to take a large position on the debut without affecting the opening price anyway, since only 9,617 shares were traded in the opening minute before the halt.
Unlike other Stealth rippers, GNS halted back down below the initial debut price before embarking on a second string of upward halts to reach its Day 1 apex. Perhaps the fact that it was untradeable on platforms like WeBull played some role in this, though Stealth IPOs are one of the rare instances where I will go against the axiom that IPOs where the tickers are not supported on all platforms are best avoided for debut trades.
After GNS reached the pinnacle of its halt action at $36.55, it sustained a downtrend that saw it establish a base at the $27 level before briefly falling down as low as $22.88 before climbing back as high as $32.00 to level off the day to close at $30.90 with not much action in post market trading.

Day 2 Action: GNS got dumped like a lead boot in early pre-market trading on Day 2, and those who acted quickly (and had access to 4:00 AM EST trading) were able to pick up shares down as low as $11.73. Surprisingly, this was a relatively high conviction trade for those who have seen this setup before, and as expected, it sustained a run all the way through the market open: culminating in a halt in the opening minute of trading at $31.75, which opened at $34.98. But it was a heat-attack inducing free-fall from there: with two halts down to a bottom of $18.50, saved by a sharp reversal back up to $28.47 that petered out to trade a in a choppy range from $20-$25 for the remainder of the day, closing on a sell-off that saw it drop from $23 in the final minutes of trading to a close at $19.43

Looking Ahead: This one already died on Day 3: opening at $19.57 and rolling downhill all day long, with little sympathy for any traders who tried to call a bottom at any point along the way. It bottomed out at $6.60 and then baselined in the range of $7.00 to $7.50 for most of the remainder of the day, with an end of day rally that pushed it back up to $8.45 before closing the week at $7.95.
With the float having ballooned up to 21.52M shares – accounting for 100% of all shares outstanding according to WeBull stats, it seems safe to assume that it’s time to move on from this IPO.

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Excelerate Energy (EE) – April 13, 2022 | 16M Shares
IPO Price: $24.00
Debut Price: $28.12
Day 1 High: $28.30
Day 1 Low: $26.61
High Since Debut: $28.50
Low Since Debut: $26.61

Day 1 Action: The debut of Excelerate Energy was no doubt hampered by restrictions on its ticker by none other than Etrade… particularly ironic because Morgan Stanley (they own ETrade), was one of the underwriters on the deal. Supposedly, whomever placed the restriction on the “EE” ticker prior to the trading debut, which is standard for IPOs that are offered to retail clients but which is typically lifted prior to the actual debut, placed a “caveat emptor” restriction on the symbol: a mistake that could not be undone for 24 hours.
Anyway, as I was unable to trade it on Day 1 in my primary account, I simply watched the debut drop off as expected, and from an open at $28.12, was able to start a position down at $26.85 (the bottom of the opening drop was $26.61).
From there it quickly rallied back as high as $27.51 before again dropping down to $26.66 and yo-yoing between $26.80 and $27.40 for most of the day, with an end of day rally that reached $27.80 that was sold-off into the close where it finished the day at $26.85.
Seems the book runners on this deal managed to deliver a decent win for IPO buyers who got in at $24.00, but didn’t leave any room for retail traders to profit from a debut trade: though again, ETrade messing up the ticker listing could not have helped demand materialize for this one.

Day 2 Action: With full access to the ticker, the stock rallied in pre-market to open at $27.38, and after initially stumbling out of the gates to a low of $26.89, rallied to a high of $28.50 before closing at $28.00.

Looking Ahead: This one could be just getting started, particularly if gas prices keep escalating alongside turbulence in the Russia/Ukraine war theater. I’m a bit salty at Etrade for messing up the Day 1 trading, as my intention had been to take a sizeable position on the Day 1 dip, and hold it for several weeks. I did attempt to enter on Day 2, but my $26.65 limit order was too low, and I was trading away from my work desk so had to kind of ‘set-it-and-forget-it’ on the trade. If I can get into this one under $27 in the next week, I’ll probably take a stab at getting in on it: I believe it runs into the $30’s in the not-so distant future.

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Sharps Technology (STSS) – April 15, 2022 | 3.75M Units
IPO Price: $4.25
Debut Price: $2.65
Day 1 High: $2.70
Day 1 Low: $1.98
High Since Debut: $2.70
Low Since Debut: $1.98

Day 1 Action: This was hot garbage from the start: after pricing the units at $4.25 it opened for trading at a pithy $2.65 and pretty much dropped from there: initially entering free-fall in the opening seconds to a bottom of $2.11 from which it managed a bounce back to $2.67, but the was all downhill from there. I bottomed out at $1.98, but essentially baselined between $2.00 and $2.20 for most of the day. Appears that pumpers may have been accumulating a position around the $2.05 mark, which is where I entered a swing trade for a hopeful Day 2 spike. I’ll be up at 4:00 AM EST trying to catch an pre-market opening surge to sell my shares in the WeBull account, and look for a spike into the market open for a chance to sell out of my ETrade account. If we don’t see any action in pre-market, I will still expect a halt up at some point on this ticker on Monday.

Day 2 Action: These super-low float plays that fall hard on Day 1 have recently experienced a jump at some point on Day 2: usually in early pre-market (4:00 AM EST), and into the market open, if not shortly thereafter. The key here is not to be greedy, so don’t expect more than one halt up. I’ll be getting out after any upward halt, and don’t intend to be holding this by the end of the day regardless.

Looking Ahead: This one should die off for a while, untill it becomes an LPX play: so keep an eye on the lockup expiration dates (hint: follow Aly Angel ). I’ll be watching this one to build a position down near the $1.00 – $1.20 level if I get a chance before it pops. With warrants involved and an ultra low float, you have to expect they debuted this IPO with an ace up their sleeve. Won’t take more than a distribution contract or FDA type announcement to pop this thing back up to the exercise price, which I believe will be in the $4-$5 range.

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NOTE: this is not financial advice, and I am not a financial advisor: this information is just my opinion and is for informational purposes only. I may have or take positions in the equities mentioned in this article in the next 72 hours. Trading equities is risky. Do your own research,and trade your own trade.

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