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IPO Trading Review for the Week of June 7-11

June 13th, 2021

Ok, so yeah, I know, you were expecting a preview of this week’s IPOs today, but here’s the deal…

There are rarely, if ever, any IPOs on a Monday, and last week there were a ton of IPOs with lots of winning going on. And there are even more IPOs this week.

So I’m gonna need another day to sum up the IPOs for the upcoming week. Sure, I could rush and put together something to get out to you today, but it would be half baked and sloppy, which makes for neither good bread or winning trades. So to quote my friend who was a Navy SEAL… ‘I’m gonna save us all some time by slowing things down.”
And in this equation, I’m hoping that ‘time’ really does equal ‘money’.

Anyway, in this newsletter we’re going to review last week’s trades, and tomorrow I’m gonna send out a list of this week’s IPOs, giving you plenty of time to strategize and play your trades for the IPOs on the calendar for Tuesday through Friday (no, there aren’t any scheduled for Monday, and if we do get a Stealth IPO on Monday, I’ll send out a special alert if I catch wind of it before it debuts).

So without further adieu… here are the IPO trades from last week:

Zhangmen Education (ZME) – debuted at $16.13 and gave us the opening halt we’ve come to expect from low-float Chinese IPO plays, and the smart trader exited between 30-50% of their position out of this first halt. Being greedy and hoping for an extended run, I held, and things were looking good as it almost immediately ran up into a second halt at $20.52. However, that was the peak, and the stock opened out of the second halt at $18.23 before crashing into a downward halt, bottoming at $14.52 before recovering into a run back up as high as $19.65. After that, ZME hovered in the $17-$18.50 range for the remainder of the day, giving anyone who stayed in the trade amble opportunity to exit with a nice profit, but punished anyone who held out for a Day 2 run. In most cases like this one, the best strategy is to take profits out of each halt on the way up and if you hold anything beyond that, ride an upward run with a trailing stop loss to lock in profits.

Marqueta (MQ) – with a huge float of 40M shares, I decided to let this one open before entering a trade, and after watching it debut at $32.50 and drop, placed a few staggered orders to build a small position on the way down, and rode the immediate bounce back up with a tight trailing stop, which got triggered before inflicting a loss. MQ dropped all the way down just below $29.00 and held $29.00 as a baseline for most of the remainder of the day. A re-entry at this baseline was a rather safe bet, as it rallied back up over $31 before the close, but the retail demand just didn’t justify playing this one with a limit order above the indication price before the debut. Traders who played this on the open either at a loss below $32.00 or are still bag holding, though with the stock sitting at 31.50 on Friday’s close, break-even is not out of sight.

Zeta Global (ZETA) – after catching some negative attention on Twitter to top the general anti-Jon-Sculley sentiment of Apple fans, it came as no surprise that ZETA produced a weak showing on its IPO debut: opening below the IPO price at $9.10 and dropping straight down to $8.32 before recovering as high as $9.21 before fading out through the rest of the day. Not worth the risk to begin with, but anyone who traded this on the debut would have been luck to exit on the rebound, as ZETA closed Day 2 down at $8.27 (DIBS) – While I was disinterested in DIBS at the start of last week, by the time Thursday rolled around, it was clear that DIBS had strong retail interest, and with just 5.75M shares, it was worth playing with a decent position. Given more time to focus on this one, perhaps I would have gained enough conviction to stay in it longer and truly capitalize on the massive profits it offered, as it opened at $21.50 and made an initial run to $26 before pulling back to the $23 zone. It then unleashed a massive rally in the Power Hour to a peak of $29.30. Day 2 offered another chance to get out above $29 at $29.74 before it finally started coming back down, but any traders who held in anticipation of a $30 break were simply being greedy. (MNDY) – debuted at a lofty $173.15, and made a brief run to $182 before starting a jagged crash that culminated at a bottom just one penny above the actual IPO price at $155.01. I took profits right away with a limit order at $179, anticipating a selloff if it touched or broke $180, and was relieved not to be in the trade when MNDY dropped to the bottom. However, diamond-handed traders who held all the way through Day 2 were rewarded with a close at $194.99 in the final minute of trading, on a jump from $185 the minute before… pretty difficult exit, but shares were being sold for $190 in after hours, which offered a bit more of a realistic exit. This could run further after the weekend. This is why I typically won’t sell an IPO for a loss on Day 1, especially if it’s a brand name equity.

LifeStance Health (LFST) – debuted at $19.55 and embarked on a 2 Day march to a Day 2 close of $24.00 with a top at $24.59 about 20 minutes before the closing bell. Impatience and lack of conviction due to the high float caused me to prematurely evacuate my position, but those who simply sat back and enjoyed the ride are either still sitting in their position and looking forward to Monday’s open, or closed out at $23.00 on the initial Day 2 run, or held tight for the end of Day 2 run at $24.00 with trailing stop losses on the run-ups.

TaskUs (TASK) – Last week’s win opportunities continued all the way through Friday, with TASK debuting at $27.55 and giving an easy early take in the $29.50 – $30.00 range on the initial spike before leveling off at $29.00 Any shares held through to the end of the day garnered nearly an additional $4 profit, as it rallied into the Power Hour and peaked at $32.94.

Kanzhun (BZ) – The success of Chinese IPOs was not to be diminished by a high float mainstream company, as BZ debuted at $33.50 and steadily rose throughout the day to an afternoon peak of $37.20 before declining into the end of day… but then making a surprise surge and pop to $38 a the closing bell. A safe and smart play likely took profits at around $36.00, as it would have taken a blind shot in the dark limit order sitting at or just below $38.00 to catch that jump at the end of the day.

Janux Therapeutics (JANX) – this is the reason I don’t play biotechs in general, and certainly not biotechs that debut at double their IPO price. JANX debuted at $34, and briefly touched at high of $36.84 in the opening minutes before falling off a cliff to a bottom of $23.45. It slightly recovered to trade sideways in the $24-25 range for most of the remainder of the day, with a brief spike up above $27 before again giving up steam to close at $25.15.

Benzinga hasn’t sent me the link for Monday’s show, but I’ll post it on Twitter as soon as I get it – or just plan on watching Benzinga’s Pre-Market-Prep Monday at 9:00 AM EST to catch my live breakdown of this week’s IPO schedule.

NOTE: This isn’t financial advice: apparently you should get that from a licensed or certified financial adviser, which I am not. This is just information, that’s all, purely informational ideas upon which you should purely treat as entertainment and should you decide to base any actual trades on this information: that’s your decision alone. Which means you can’t hold me liable for any losses, and don’t have to give me any credit for any wins. Ridiculous that I have type this out every week… yeah, I know, I could use a boilerplate, but whatever… Good Luck out there!

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