I guess it doesn’t take much to get the market back in the mood for IPOs – after worse-than-expected CPI data last Friday, the market tanked as expected. But over the weekend, it seems that traders decided it either wasn’t that bad, it was already priced in, perhaps we’d at least gotten closer to the bottom, or perhaps just “screw it – buy more stocks”… and Monday saw a strong rebound rally that carried into Tuesday. And so now we MIGHT have conditions conducive to a few IPOs!

We even have a mainstream IPO coming onto the calendar this week, albeit a biotech, and the low-float IPOs are all faces that we’ve become perhaps a bit too familiar with due to their persistent attempts to debut despite repeated failures to fill their order books. I’m not sure that a less tepid market makes these offerings any more appealing, and I don’t have any reason to believe that all of a sudden there will be high demand for these debuts from day traders. With the NASDAQ scrutinizing every issue that comes to market, it will be surprising if any of these are able to pull off the kind of shenanigans that have ensured a significant pop off the debut in some of these setups, and I don’t see anything resembling the kind of hype that has sent these setups on substantial post-debut rallies in recent years (and nothing even close to what we saw after HKD re-configured day traders’ perceptions of what was possible).

I’ll be mostly watching this week’s debuts from the sidelines – partially due to a planned family vacation, but also simply because we haven’t seen an IPO deliver a strong debut trade since NASDAQ reigned in the IPO train.

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This Week’s IPOs:

• Alopexx (ALPX) – October 20, 2022 | 3M Shares
  

• Prime Medicine (PRME) – October 20, 2022 | 8.9M Shares
  

• Beamr Imaging (BMR) – October 21, 2022 | 3M Shares
  

• Intensity Therapeutics (INTS) – October 21, 2022 | 2.22M Shares

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Ok, Let’s jump in:

Lockup Period Expiration (LPX) Watch:

Most IPOs are subject to either 90 or 180 day lockup periods before insiders and shareholders who owned shares of a company prior to the IPO can sell their positions. Typically, the dilutionary effect of this event will cause a stock price to drop, as supply increases without any fundamental changes in the value of the underlying company. Many investors will wait for LPX before starting a long term position in a company.
Conversely, with low-float IPOs, we often see press releases and other announcements dropped going into, or slightly following LPX, presumably as insiders attempt to drive up the share price before they are able to exercise their warrants and sell their shares.

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