IPO Trading Review for the Week of October 31, 2022 – November 4, 2022

November 6th, 2022

The low-float IPOs keep getting rescheduled, and last week’s Fed announcements tanking the market didn’t help their causes at all. However, it does look like we’ll have a couple of IPOs get to the starting line this week, and Chinese variants continue to update their F-1 filing. A couple of uplistings are on-watch for potential Stealth plays as well, and early pre-market PR drops have produced some substantial wins: so there’s plenty of opportunities out there in IPO land despite the dearth of new issues.

Another opportunity that appears to be in-play for Monday’s trading session, is the 3 day bounce off negative reactions to Fed announcements: particularly in recent mainstream IPOs in the growth/tech space. Two that I have consistantly watched and played again-and-again are Unity (U) and SentinelOne (S) – both are at all-time-lows off the last round of fed-induced FUD, and each has rebounded hard off the bottoms of previous dips. It’s rather well accepted that recent IPOs tend to drop hardest and fastest in a broad market decline, and rebound/rally fastest on the way back up.

With no IPOs to review from last week, I’ll just jump into the recent IPOs that ran on pre-market PR drops.

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

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.

Forza X1 (FRZA)
Water testing their boat and boat reservations
IPO Date: August 12, 2022
IPO Price: $5.00
LPX Date:
November 12, 2022 (based on 90 day lockup)
LPX Period: 90 days
Historical LPX Notes: This one popped on the IPO debut as it went live amidst the post-HKD eurphoria.
Outstanding Shares: 10.45M
Close day before vol:
High of the Day on vol: $2.76
Recap: This one was on watch going into LPX, and the back-to-back PR drops made it an easy spot on the Day 2 pump. I was able to patiently wait for a pullback off the initial move up to $2.31 to take a position on the drop just below $2.00 and rode it up to my target of $2.50 (exiting at $2.55 with a trailing stop).
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Virax Biolabs (VRAX)
Catalyst: New product announcement
Type: IPO
IPO Date: July 21, 2022
IPO Price: $5.00
LPX Date: October 21, 2022
LPX Period: 90 days
Historical LPX Notes: VRAX was a bit of a Boustead Specail when it debuted at $20.00 and bounced around for the first two weeks of trading on relatively low volume. It jumped again at the end of August with a spike on November 1, 2022 and has since declined from there until last weeks pump.
Free Float: 4.35M (read below regarding last Friday’s offering)
Shares Out: 11.37M
Close day before vol: $1.68
High of the Day on vol: $2.66.
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Huadi International (HUDI)
Catalyst: Announced plan to enter new energy industry, with discussions announced with Sichuan Local Government
Type: IPO
IPO Date: January 22, 2021
IPO Price: $5.00
LPX Date: NA
LPX Period: NA
Historical LPX Notes: This wasn’t so much of an LPX play, as far as I’m aware of, as what appears to be a Stealth IPO-type squeeze. HUDI has been volatile ever since it initiated a choppy climb from the $3 range up to $35 in October 2021. Since then, it has bounced around rather unpredictably
Free Float: 3.24M
Shares Out: 13.24M
Close day before vol: $30.84
High of the Day on vol: $192.88.
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