CPI data was the dominant force in this week’s market (again), coming in on Tuesday morning even higher than the lofty numbers foretasted by the ‘experts’ and causing a market-wide dip across all sectors (again). The good news is that many, including my imaginary friend, Jim Cramer (I imagine he’s my friend), calling this “the bottom”. We already knew that we’d likely see at least half of the IPOs on the calendar at the beginning of the week get pulled or rescheduled. In the end, what started as a table of 8 ended up dwindling down to just 2-3 for us to trade.
The good news is that, as predicted, the IPOs we did see come through to market under such adverse conditions were, indeed, Stealth setups. Depending on whether you received allocations of IPO shares or played the debut, you probably agree with that statement. More encouragingly, is the idea that if we HAVE in fact, reached the bottom of the bear market, then we could be in shape to finally get some attractive mainstream IPOs with retail brand recognition around the corner. Anyway, until that day comes, we’ll keep finding win opportunities in low-float land.
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IPOWARRIORS DISCORD IS COMING!!
Ok, so I’m finally going to relent to popular demand and move the IPOWarriors Reddit thread over to Discord. I’m still playing with the idea of how exactly I’m going to balance this between the Premium and Free memberships, but roughly my thinking is that for everyday trading and loose discussion about the IPO schedule, it will be open to all members, and when it comes to live trading the IPO debuts, that will occur in the Premium Members section. Stay tuned for more details.
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Ok, Let’s take a look at what happened last week in IPO Land:
Nano Labs (NA) – July 12, 2022 | 1.77M Shares
IPO Price: $11.50
Debut Price: $7.61
Day 1 High: $13.34
Day 1 Low: $7.61
High Since Debut: $13.34
Low Since Debut: $6.32
Day 1 Action: There must have been some confusion on this one off the debut – the market maker had the shares paired up at $9.60 before opting to wait and ultimately deliver the opening trade at just $7.61 on 66k shares. It immediately halted up from there, with an insta-halt at $8.37 that opened at $9.01 and ran steadily up to a top at $13.31 before receding back down to hover in the $9.50 to $11.00 range for most of the remainder of the afternoon: pushing up to $12.50 before the closing bell.
Day 2 Action: Day 2 started out hinting at a possible rally, after opening slightly down from the previous day’s close at $9.77 and pushing up to a hard sell wall at $12.00 before getting dropped down to $8.80 and base lining around the $9.00 mark for most of the remainder of the day outside of a failed walk up to VWAP in the mid afternoon, closing at $8.80 and continuing to drop in after hours.
Looking Ahead: The rest of the week brought further downside, with new lows established around 10:00 AM EST at $6.35 before climbing back up the mid $7’s later in the day. After hours news on announcing an early stage investors agreement to cancel warrants good for 23M shares at $0.26 per share and another agreeing to cancel warrants for 11.5m shares at $0.26 per share appeared to contribute to a bump up to $9.00 in after hours. The next day saw volume shrivel up, with spotty trading and a gradual decline to a close just below $7. I dunno, I still feel like this one hasn’t quite shown us what it’s got in store for us, I’m just not sure how far they will let it drop before they rip it.
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Intelligent Living Group (ILAG) – July 13, 2022 | 5.06M Shares
IPO Price: $4.00
Debut Price: $22.00
Day 1 High: $26.40
Day 1 Low: $2.21
High Since Debut: $26.40
Low Since Debut: $2.21
Day 1 Action: As predicted, this was a Stealth IPO that presented a generous gift to all those who received any allocation at all, and provide little in the way of upside-to-risk for those who tempted fate once the stock began trading. An opening move from $22.01 to $24.00 failed to deliver a halt by a single penny, and it appears that algos kept this one actively trading for what must be a record for a “$4.00 Special” that failed to halt in the opening minutes, holding steady in a razor thin margin around the $21-22 mark for a solid 24 minutes before finally capitulating into a halt down that reversed at $18.50 and slowly climbed back up through a halt to hit a high at $26.40.
But it was game over from there, as shorts piled in on top of sellers to toss the share price off a cliff into a close at $6.12 with further downside achieved in after hours: shares trading as low as $5.52.
Day 2 Action: Those who took the risk of placing an order down at the end of day crash under $6, and were able to wake up and offload their positions in the wee hours of pre-market trading, stood to take a tidy little profit as the price ran up as high as $8.53 before leveling back into the the $6 range for the market open. From there, the sell-off continued, and forecasts of the eventual $2 price tag on this one came sooner than expected, as the share price bottomed out at $2.21 before closing the day $2.54.
Looking Ahead: Hard to imagine this one dropping much further than it’s current low without engaging in some kind of short lived rally at some point. If we look at JSCE, we saw a similar open and drop that bottomed out on day 5 at $3.61 before embarking on a monster rally that peaked nearly 3 weeks later at $16.19 and hit $17.82 nearly a month after that. It’s tempting to take a small high-risk play on this one down below $3, though I will hold off a bit and see if they let this fall a little further to as close to $2 or below as possible before I feel even remotely ‘safe’ taking a position on garbage of this variety.
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AMTD Digital (HKD) – July 15, 2022 | 16M Shares
IPO Price: $7.80
Debut Price: $13.00
Day 1 High: $19.70
Day 1 Low: $7.80
High Since Debut: $19.70
Low Since Debut: $7.80
Day 1 Action: With most traders’ attention already focused on the weekend, HKD debuted on super-thin volume of just 15k shares with a rich premium at $13.00 – though perhaps counterintuitive, this is exactly the kind of setup I look for in any IPO debut – especially one with direct ties to Asia, and HKD didn’t disappoint. It immediately halted up to $14.18 and opened from there at $16.25. I was in at the halt, and when it didn’t follow with an immediate second halt, I exited both of my positions at roughly $15.00 combined for a nice $2 win on a relatively quick trade, and after failing get an attractive entry point over the following dip down to $13.80 before a run to $18.42, and with tiny volume and large spreads on both sides of the order bar, I decided to pack up my wife and kids and headed to the beach for an early weekend.
Those who stuck around and held on a bit longer were rewarded with a run at around 2:30 PM EST to the high of the day at $19.70 from which it pulled back into the close at $16.21
Day 2 Action: This was a Friday debut, so Day 2 will deliver its verdict on Monday.
Looking Ahead: Completely unpredictable, though the real float on this ticker has yet to start trading. With 16M shares in the free float, and just 309k shares traded on Day 1, this one is likely to bounce around on choppy volume until the large block shareholders decide to cash in their chips… at that point, we should expect this to quickly return to the low single digits.
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Recent IPO Runners:
We often see recent IPOs, especially the low-float variety, make monster runs after consolidation following their IPO. Often, these moves coincide with their 90 and 180 day lockup expiration periods (“LPX Plays”): this is a play we actively track and discuss in the weekly preview newsletter.
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SaverOne (SVRE)
Catalyst: closed initial public offering
IPO Date: June 3, 2022
IPO Price: $4.13 per unit
Underwriter’s Overalotment Expiration: July 18, 2022
LPX Date: September 1, 2022 (based on 90 day lockup)
LPX Period: 90 days
Historical LPX Notes: none
Outstanding Shares: 3.99M per Stock Analysis
Close on Day Before PR: $1.98
Near Term High After PR: $4.17 on Day 5
Recap: SVRE was a broken IPO just a month an a half ago, that had priced it’s units at $4.13 and immediately sold off to an eventual bottom at $1.81 just two days before releasing a headline announcing “five new agreements with leading companies” that initiated a sustained run over 5 market sessions to high of $4.17 on Thursday. This coincides with the underwriter’s option to purchase additional units, presumably allowing them to sell out with a profit. With a low float and all shares outstanding in the free float, one has to wonder if a secondary offering is in the mix.
Looking Ahead: With no further outstanding shares, and ultimately being a garbage company, this is running on . Friday saw this one sell off further, and could just as easily be heading back to the land of the forgotten pump play as it could find life in another pump. I’m not trying to guess which way, and will instead be looking for the next low float IPO to run.
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