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IPO Trading Review for the Week of January 10, 2022 – January 14, 2022

January 9th, 2022

This past week gave us our first taste of mainstream IPOs, with Justworks (JW) as the first tech/growth company to attempt a debut, and TPG Group as the first IPO of the year to go live with a standard float. JW ended up pulling the plug, and is an indication that we’re unlikely to see any weak companies go public until the market stabilizes a bit (outside of low-float random IPOs)… speaking of which, low-float came through again this week with an uplisting that performed well, thought not a play that could have supported a wide audience (we’ll get to that in a minute).

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Remember that Monday, January 17th, 2022 is a public holiday,
as we remember Martin Luther King Jr. So things kick off on Tuesday… My appearance on Benzinga will be be moved to Tuesday, January 18th, 2022 at 12:00 PM EST (noon), so I’ll send out a link once I get it.

Thanks to all of you who joined the first Live-Stream IPO I held for the TPG IPO… and please SUBSCRIBE TO THE NEW IPOWARRIORS YOUTUBE CHANNEL:

https://www.youtube.com/channel/UCS5j-KpdsZlLEaReHXIDqqQ

And there’s a Stealth IPO on watch for this week: be sure to keep an eye on your inbox Monday night, I’ll be releasing the ticker then.

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Ok, let’s review last week’s IPOs:

Hillstream BioPharma (HILS) did a little better than most low-float biotechs, with a debut at $3.75 that pushed upwards for the opening 10 minutes to a high of $4.17 before following script to a dropoff that bottomed at $3.27 without any meaningful breakout. It then traded downward for the remainder of the week and closed at $2.85 on Friday, the the ultimate bottom marked at $2.55. Like most recent low-float biotechs, there might be a play to build a position under $2.60 on hopes of an eventual headline-driven run, but this one could be a long wait, so I’m not gonna stick my funds in this one.

TPG Group (TPG) was the main event of the week and all eyes were focused on seeing how the year’s first mainstream IPO would perform. Given what was at stake, it seems the underwriters weren’t going to take any chances of getting egg on their faces, and priced the IPO at mid-range: ensuring at least a small ‘pop’ on the debut… they went even further in making sure this debut didn’t flop when they seemed to hold the debut price at $33.00 despite a heavy buy-side imbalance. I was ultimately encouraged by this setup, understanding that this was priced not-to-fail, and while not a large play by any means, was happy to pick off a 1-point win as the price fluctuated between $32.50 and $33.50 for a few minutes before pushing up into my ‘easy-safe-win’ target of $34.00. There was a pretty large sell wall at $34.00, and I wanted to take my win and move on with my day: so I placed a sell order at $33.95 and was comfortably rewarded.
There wasn’t all that much volatility in this one anyway, but those who held out for an end-of-day run were rewarded with a spike into the close that peaked at $34.99 (a good example of why I set my limit-order exits in increments slighly below whole number targets). I didn’t expect much of a Day 2 rally in this one, as it’s not really a name that retail traders outside of the financial industry are likely to get very excited about, and it didn’t do all that much on Day 2, so best to just take a quick win of the spoon-fed debut setup and move on.
The takeaway from this one is that strong companies will proceed with their IPOs even in an inclement market, and we can expect relatively retail-friendly pricing when they debut.

Cerebus Cyber (CISO) this was an uplisting, which I generally avoid, but given that Boustead Securities was the underwriter, and the OTC ticker traded up from around $5 per share in October 2021 and ran up to $49 in the days leading up to the IPO on tiny volumes, clearly something was up. I got an allocation of 30 shares from WeBull, and tried to jockey into some more shares in the early pre-market trading around $5.00, but got too cute and missed out on the opportunity. Most of the action was in pre-market anyway, as the price ran from $5.00 to an opening trade of $7.13 in regular market hours… then quickly up into a halt at $7.84… it opened up at $8.20 and peaked at $8.74 before quickly reversing down into a halt from there. It became a pretty tricky trade from then on, and not something I would have stayed in on beyond the second halt down had I been able to add to my position in early pre-market.
The second halt down opened at $6.72, bottomed out at $6.00 and then rallied up to $7.24 before giving up momentum. From there on it was a gradual decline to a bottom just above $5.00 which tried to climb back to $6.00 but made no real run to VWAP, and closed the day at $5.42
Traders who have been watching this are wondering if that was the whole play: just an opening pre-market run: or whether there are more fireworks in store for this one. I’m on the fence: pushing this to $49 was an odd move that I can only explain as someone cornering the market for free shars, the float was just 2M shares, and I would assume that most allocation recipients flipped their shares on the opening run. We also saw the price stabilize above the IPO price at $5.00, which feels like the price was held up and possibly the float was being accumulated… so MAYBE we see this get boosted again on Tuesday.
On the other hand, the outstanding share count is somewhere around 110M shares by my calculation: as CISO funded a bunch of acquisitions over the past year in share-based buyouts, and those shares will heavily dilute the stock price once they become tradeable. I’ll be watching closely in Tuesday’s pre-market, and may take a token position if I can get in at a price I like….

… but there may be something even more interesting in the cards for Tuesday, and I don’t want to be distracted by CISO if my haunch is correct. Watch you inbox Monday night… I’ll send out the ticker along with my hypothesis.

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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