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IPO Warriors IPO and LPX Preview for August 8 – August 12, 2022

August 8, 2022

The IPO market is rocking: HKD set the market for low-float stocks on fire, and MEGL delivered an encore that has carried the momentum to a new level in insanity. The flames quickly spread to virtually every recent low-float IPO on the market, and the hype surrounding this basket of stocks does not appear to be abating any time soon.

But as with every cycle in the stock market, once a play becomes too predictable, the setup gets ruined. In the case of IPOs, when too many buyers pile into the opening print, we see ridiculous debut premiums at unsustainable levels that can force a halt up, followed by a violent sell-off that triggers “the halt of death” scenario, whereby the opening price from the halt is significantly lower than the halted price, and further downside comes as buyers panic sell out of their positions.

Recognizing that there is much more than simply a low-float behind the setups we saw with HKD and MEGL will allow us to recognize the difference between these and othe setups, so as to avoid some of the potential pitfalls in the next slate of IPOs on the calendar. At this point in the cycle, we’ve got a lot of confidence and enthusiasm from traders who banked on MGAM, MAIA, and even BRSH following HKD’ massive run, not to mention MEGL, which may have done the disservice of convincing many traders that these types of debut runs are normal off insane debut premiums.

So the goal of this week’s analysis is to help identify which, if any, IPO debuts have a shot at delivering massive gains, which ones are more likely to set greed traps, and which are outright losers (and where we might still find opportunities to profit from trading the swings in all setups).

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Live IPO trading and commentary on upcoming IPOs will be reserved for Premium Members within the #premium-members-room.

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This Week’s IPOs:

  • bioAffinity Tech (BIAF) – July 22, 2022 | 1.5M Units

  • Forza X1 (FRZA) – August 11, 2022 | 3M Shares

  • CorpHousing Group (CHG) – August 12, 2022 | 4.285M Units

  • Jianzhi Education Tech (JZ) – Possibly this week | 5M Shares

  • Onfolio (ONFO) – Also maybe this week | 1.77M Units

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Ok, Let’s jump in:

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