The IPO market had been ripping for weeks: with virtually every low-float debut providing substantial, if not massive, upside win potential save for a single outlier (silly LUCY… they thought $7.50 with a warrant was gonna run?). And coming into last Friday, it appeared that the streak was still ripping: STBX provided savvy traders with an easy upside run, and gave patient bottom-feeders a nice upside move at the end of the day, but likely burned less experienced traders who chased the open and got burned on the fallout. MOB offered a rare upside move for an IPO with warrants: likely benefiting somewhat from having a sorta cool business but more likely simply the only IPO between STBX and the white-hot JZ debut.
Then Friday happened… JZ gave 0 or 1 share allocations to WeBull traders,leaving them on the sidelines from a practical perspective, bumped AMTD off the deal, and still managed to debut at an astonishing $126.. and STILL moved up from there! But with just 14k shares traded on the debut, inexperienced traders who chased in at $150+ and didn’t take profits out of the next halts quickly found themselves in seriously red positions. PXMD ripped off the open, showing some hope for the trade to continue, but not sure how many traders outside of IPOWarriors really went big on that one. ONFO and JFBR proved that gravity does still exist in low-float IPO Land. And to top it all off, Friday’s Fed announcement seems to have garnered a cold reception from the market.
Generally speaking, stocks that rally during a cold market experience shorter lived and more tempered moves to the upside: especially for IPO trades. But on the other hand, there generally aren’t as many pumps in focus when the market is cold: so IPOs can get more attention under those circumstances. I still think day traders are keyed in on low-float IPOs, but I do wonder whether newcomers to the IPO trading game who get stuck chasing setups they don’t fully understand will double down and do the research to better understand the winning setups or whether they go in search of the next trending setup.
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