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IPO Warriors IPO Preview for February 7 – February 11, 2022

February 8, 2022

Mainstream IPOs have been on the shelf for most of the year, but the action in IPO Land has been intense due to the plethora of low-float IPOs from lesser known underwriters. While we haven’t seen many that ripped off the debut (HOUR being the lone exception), we have seen impressive Day 2 runs off of what appeared to be disastrous Day 1 drops in many low float plays, including KSCP, MTEK, and NVCT.

We have a long list of low-float IPOs eager to wade into their market debuts this week, and while the trend has been for most of these to fall from the initial trade into a bottom trough, there have been significant gains to be taken for the patient trader who is willing to slowly accumulate a position along the bottom of these baselines, even into the closing minutes of Day 1, and wake up to sell out of their position in early pre-market or catch a rip in regular trading hours. Until this pattern breaks, it seems worthwhile to take a gamble on the lower-float targets should they drop hard on their debuts, and hold into Day 2.

Having said that, I am on the lookout for Stealth IPO setups, given that the PRC is on Chinese New Years holiday while hosting the Winter Olympic games, so it would be an ideal setup for Chinese companies/individuals who want to pull off a money transfer through a stock listing to engage their shenanigans.

This Week’s IPOs

  • TC BioPharm (TCBP) – February 9, 2022 | 5M Shares

  • HeartCore Enterprises (HTCR) – February 10, 2022 | 3M Shares

  • CorpHousing Group (CHG) – February 10, 2022 | 2.3M Shares

  • Austin Gold (AUST) – February 11, 2022 | 3M Shares

  • Direct Digital (DRCT) – February 11, 2022 | 2.187M Shares

  • SQL Technologies (SKYX) – February 11, 2022 | 1.5M Shares

  • Cariloha (ALOHA) – February 11, 2022 | 2.3M Shares

  • The tru Shrimp Companies (BTRU) – February 11, 2022 | 3M Shares

  • Sky Technologies (SKYX) – February 11, 2022 | 1.5M Shares

  • Meihua International Medical (MHUA) – TBD | 5M Shares

  • Ocean Biomedical (OCEA) – TBD | 2M Shares

  • Yi Po International (YBZN) – TBD | N/A



Ok, Let’s jump in:

TC BioPharm (TCBP) – February 9, 2022 | 5M Units (1 Share + 1.25 Warrants)
Price Range:
$4.25
Offering Size:
$22M
Shares Outstanding:
29M

Industry: Biotech

Overview:
This is a British clinical-stage biotech with a proprietary allogenic gamma delta T(GD-T) platform that focuses on immunotherapy treatments for cancer and viral infections (including COVID). Their leading allogenic candidate, OmnImmune is entering Phase 2/3, with secondary candidate ImmuniStim, focused on COVID-19, currently in Phase I trials. Their CAR-T program focuses on solid and haematological cancers, and is still pre-clinical.

Considerations: Well, normally I’d stay away from biotechs, but this one does have a COVID angle, and another candidate entering Phase 2/3, and last week we saw NVCT debut on Friday, drop, and then rip 200% on the following Monday… in fact, the Day 2 run on low float IPOs that busted on Day 1 has been pretty consistent – so perhaps this one is worth picking up a few shares at the end of the day if it’s significantly fallen off it’s opening debut.

Growth Numbers: pre-commercial trials, no financials

Baseline Financials:
– Pre-IPO Cash and Equivalents:
$2.09M
Post-IPO Cash and Equivalents: $24.25M
Accumulated Deficit: £29.6M

Notes from the F-1:
– “
Management believes that the existing cash and cash equivalents will be sufficient to fund the current operating plans through to end of February 2022”
—> Basically, they are desperate for money, so they’re doing an IPO.


Underwriters:
The Benchmark Group

IPO Classification:
Biotech Bust

Recent Similar IPOs: NVCT

Trading Strategy:
I guess we just wait for it to drop off the debut, watch for a baseline, check to see if there’s any sign of accumulators picking up the float, and then be ready to sell the Day 2 run. Although the float may not be small enough, and the price may not be low enough for this setup to be in play. So maybe don’t mess with this one until it drops a bit further and hope for a QPX move. I’m not gonna get involved with this one, but I missed NVCT as well, so don’t take my word on it: I just don’t want to be tied up for a potential Stealth IPO the next day.

Brand Name Recognition:
None

Debut Trade Conviction Level:
None.

+++

HeartCore Enterprises (HTCR) – February 10, 2022 | 3M Shares
Price Range:
$4.00 – $6.00
Offering Size:
$15M
Shares Outstanding:
18.92M

Industry: Software (Japan)

Overview:
This company develops Content Management Systems (CMS), Customer Experience, and digital transformation software for Japanese clients. They claim to be the #1 CMS provider by market cap in Japan, and boast 791 clients including Japan Airlines, Hitachi, RICOH, and Brother. Their growth numbers are respectable and their baseline financials are positive across the board, but what makes this one most interesting is the underwriter and low float… and well, a very loose connection to China through one key excutive… we’ll get into that later.

Considerations: The last low-float Japanese IPO we saw was TKLF, which priced at $4 and debuted at $41+, then swung wildly on Day 1 from a low of $13 back up to $37, so we know these can be volatile, and more importantly, we know it’s possible for a Japanese IPO to be a Stealth IPO. The underwriter is Boustead Securities, who has produced many ‘Stealth IPOs’ that ran up to 5x gains or more from the debut over multiple days, but recently their high fliers have debuted at relative highs, offering no play for retail traders to get in on the debut for an upside play. This one does not appear to be a Stealth debut on the surface: although digging into the F-1 exposed one possibly key connectio to China: the CFO has a Chinese name (… then again, the CFO could be the key link to Chinese money, so I’ll be keeping a close watch on this one, and depending on what I see in the pre-debut IPO crossing, may spot some clues as to whether this is poised to run off the debut or not.)
NOTE: I have put in for an allocation request on WeBull, as pretty much every Boustead IPO has either ripped off the debut or debuted with a hefty premium.

Growth Numbers:
– Revenue Growth:
26% for 9 months ending September 30, 2021
– Gross Profits:
33% for 9 months ending September 30, 2021
– Gross Margin:
48% for 9 months ending September 30, 2021

Baseline Financials:
– Cash Flow:
positive
– Net Income:
positive
– Operating Profit:
positive

Notes from the F-1:
– The name of the CFO is Chinese: “Qizhi Gao”

Underwriters:
Boustead Securities

IPO Classification:
Ultra-Low Float

Recent Similar IPOs: TKLF MYNZ

Trading Strategy:
Well, it’s a Boustead IPO, so we have to keep an eye on it, but recently, we haven’t seen any of their deal offer much upside from the heavily inflated debut premium. I’m somewhat suspicious of this being a Stealth IPO given that we recently saw TKLF debut under the guise of being a Japanese company, and I do think it would make sense for the Chinese money laundering theory, that we should see a couple Stealth setups while China is in the middle of their New Years celebrations on top of the distraction of hosting the Winter Olympics. If we see pre-debut indications around $15, then we could be looking at an ideal Stealth setup for a debut entry. A debut up above $20 is too high to test an upside, and if we see it under $10, then maybe it’s the first foreign Boustead deal that doesn’t really have much of an upside even for their account holders (I’ll still play the debut under $10).

Brand Name Recognition:
None

Debut Trade Conviction Level:
High

+++

CorpHousing Group (CHG) – February 10, 2022 | 4.285M Units (1 share + 1 warrant)
Price Range:
$3.00 – $4.00
Offering Size:
$17.25M
Shares Outstanding:
91M

Industry: Travel Accommodations

Overview:
This company manages short-term vacation rental properties and lists them on 3rd party travel sites, with the intention of setting up their own online booking platform to improve margins.While their revenue growth is up substantially in the last 9 months, we have to bear in mind that these numbers are in comparison to peak COVID numbers, and their gross profit growths significantly negative on unattractive gross margins… all this on top of negative baseline financials.

Considerations: This has one advantage in that it is a low-float IPO that will possibly go live as the ‘next low float IPO’ (that isn’t biotech) before the onslaught of ensuing IPOs on Friday, so maybe that will be enough for day traders to try and play the debut for a down/up reversal akin to MTEK, but the generic low float IPO trade tends to get played out in cycles, and I think that the run from HOUR, to KSCP, to MTEK has brought us to the point where simply being low-float may not be enough. Too many ‘buy-the-dip’ traders will keep the dip from being very pronounced, and not enough buyers left to give it a pop on the rebound. And furthermore, this company sounds pretty lame. Running a bunch of AirBnB rentals with the goal of then starting your own AirBnB is a bit like selling a bunch of products on Amazon and aiming to reduce margins by selling on your own website: sure, your margins will be better on sales in your own channel, but your chances of scaling the total business up to something comparable to Amazon isn’t a serious ambition. There are warrants involved, and they have apparently increased their offering, according to the S-1, to 4.28M Units from what had previously been announced at 2.3M shares, while reducing the price.
I’m not really sure how low it can go from an expected debut of $3.50, but with a warrant to account for, it seems reasonable that it drops below $2.00

Growth Numbers:
– Revenue Growth:
+133% for 9 months ending September 30, 2021
– Gross Profits:
-122% for 9 months ending September 30, 2021
(no, not a typo, it’s a negative number)
– Gross Margin:
2.56% for 9 months ending September 30, 2021

Baseline Financials:
– Cash Flow:
negative – improving
– Net Income:
negative – improving
– Operating Profit:
negative – improving

Notes from the S-1:

– Actual Units offered is 4.285M and includes warrants.
– CEO will own 70% of the stock after the offering

Underwriters:
Maxim Group (they’ve had a lot of low float losers)

IPO Classification:
Mainstream IPO

Recent Similar IPOs: GFS, SKYT

Trading Strategy:
This one has warrants, isn’t that low of a float, but has opted to go so low in price that it begs to ask the question of how low can an IPO debut go? They don’t generally start lower than $4.00 – and given that warrants are involved, pricing at $3.50 seems to make a sub-$3 debut a very real possibility, with a sub-$2 level lurking ominously close. Would an IPO want to get into trouble for failing to meet NYSE listing rules from the get-go?
Another interesting element is that the CEO controls a significant share of the float… so is there some setup in play to ensure this runs significantly out of the gate? If I see something odd in the pre-debut balancing, I may be reeled into this one, but otherwise it’s a sit and wait, maybe accumulate at a baseline on Day 1 for a Day 2 rally – like all the rest.

Brand Name Recognition:
Low.

Debut Trade Conviction Level:
Moderate.

+++

Austin Gold (AUST) – February 11, 2022 | 3M Shares
Price Range:
$4.00 – $6.00
Offering Size:
$18M
Shares Outstanding:
12.5M

Industry: Gold Mining

Overview:
This company owns the gold prospecting rights to several plots of land in Nevada near existing mines. The CEO has a history of delivering value to clients, with his most recent company being sold for $2.8B (Pretium Resources) at a considerable premium for shareholders.

Considerations: This one was repeatedly rescheduled again and again from November into December 2021 before ultimately throwing in the shovel and delaying the deal until this week. Their website is laughably bad, with no updated information, and some pages showing error messages. Perhaps they feel that with the market in the dumpster, there will be an interest in gold. There was a time when the prototypical pump-and-dump scheme revolved around gold mining companies, so there will be an abundance of skeptics on this one, and the market has not been too friendly to Roth Capital IPOs, so I’m not sure this will get much immediate retail demand. Then again, gold is considered an inflation hedge, and perhaps that brings this one some attention. Maybe one to watch, but unless the temperature of the social buzz around this one gets hot, I’ll be watching it from the sidelines.

Growth Numbers: None: they haven’t even built any mines yet.

Baseline Financials:
Also none

Notes from the S-1:
Didn’t really bother

Underwriters:
Roth Capital (an unloved underwriter who has yet to deliver a debut winner since I’ve been watching their IPOs)

IPO Classification:
Low Float

Recent Similar IPOs: LITM (I guess, I mean, it’s also a pre-operational mining company, but Lithium is hotter than Gold these days).

Trading Strategy:
Can’t imagine much interest in this one off the debut. Perhaps it’s a low-floater that gets accumulated on Day 1 and runs on Day 2? Who knows, that’s been a winning setup for the past 3 weeks, and we saw it again on NVCT from Friday last week to Monday this week. Almost makes sense to buy any low-float IPO that bombs on Day 1 just to see if it rebounds in the following days.

Brand Name Recognition:
Low.

Debut Trade Conviction Level:
Low..

+++

Direct Digital (DRCT) – Date February 11, 2022 | 2.187M Shares
Price Range:
$7.00 – $9.00
Offering Size:
$20M
Shares Outstanding:
13.57M

Industry: Programmatic Ad Buying/Selling

Overview:
This holding company operates three platforms that provide services in the digital ad management space:

Colossus SSP: is a supply side platform that sells ads for their media customers.

Huddled Masses: creates digital marketing campaigns for clients. Kind of seems like a well-established digital marketing agency.

Orange142: this is the demand side platform that handles data management, audience targeting, content marketing, and analytics for their clients.

They claim 56k sell-side clients (clients selling advertising), and just 158 buy-side clients. So it seems like their primary business is selling ads for their clients, and Colossus SSP appears to be their primary revenue driver.


Considerations: This one was rescheduled from last week… and the week before that as well, and has been downsized from 4M shares to 2.187M shares, so perhaps it was just a response to frigid market conditions, but clearly there has not been all that much demand for their offering as of yet. As for the company, it all feels like a digital marketing company that has built up scalable services platforms to offer services to mid-sized businesses that want to optimize their digital marketing budgets. With very strong growth metrics and positive baseline financials, coupled with a low float, this one could be interesting. (ok, I typed that line last week, now I’m not so sure and feel this could get lost in the crowd of low-float IPOs on the calendar for Friday).
Don’t particularly like that Roth Capital is an attached underwriter, as the market has repeatedly shunned their offerings, seemingly out of spite. So that makes me a bit cautious in taking any risks on this debut.

Growth Numbers:
– Revenue Growth:
+330% for 9 months ending September 30, 2021
– Gross Profits:
+693% for 9 months ending September 30, 2021
– Gross Margin:
53% for 9 months ending September 30, 2021

Baseline Financials:
– Cash Flow:
positive – improving (negative in 2020 and positive in 2019)
– Net Income:
positive – improving (negative in 2020 and 2019)
– Operating Profit:
positive – improving (negative in 2020 and 2019)

Notes from the S-1:
– Risks: restricted use of 3rd-party cookies (specifically by Google), would affect the effectiveness of their platform. While they believe they can adapt and develop alternatives, without specific clarification on how they will do this, I am a little concerned about the long term performance of this company.

Underwriters:
The Benchmark Company (yes, same as FGI), Roth Capital

IPO Classification:
Low Float

Recent Similar IPOs: HOUR PIK STRN
Potential Comps: TTD… sort of a stretch given that TTD is much larger, but they both operate in the same general market, so comps are not unreasonable. DRCT is seeking a far smaller valuation.

Trading Strategy:
This IPO does not have anything that indicates a Stealth IPO setup, and I’m not sure how sexy this will appear to day traders beyond the ultra-low, float, but given the buzz around low float IPOs from the last couple weeks, maybe it can rebound off a Day 1 drop into a Day 2 rip. The $8 debut price leaves plenty of room to fall off the open (like VINE did), so again, we need to be watching the sell-side imbalance on the debut. If we see a heavy buy-side and only a slight increase in the debut indication price, then we may have a strong candidate for a debut run, but anythinog else would indicate a more conservative strategy. This one kind of feels like it could behave like STRN, which had a strong debut run for several days after the IPO, followed by a hard pull back, and then pumped even higher. The potential for a post-dip recovery run is pretty strong if this one doesn’t perform well out of the gate, so waiting patiently for the bottom of a dip, and averaging down as needed to then catch eventual algo or trading group pump could work out. It’s not the lowest float of the day though, so I dunno… not to excited about it in a crowded field (I will end up saying that about each one, so likely I’m wrong on at least one pick here, but better to miss one than catch knives on many)..

Brand Name Recognition:
Low.

Debut Trade Conviction Level:
Low. Yeah, I’ve flipped on this one from being “Moderate/High” a week ago, but there clearly wasn’t much demand for this one for the past two weeks, and now it’s slated to debut in a crowded field with other more interesting possible contenders. To me, the play has clearly become to wait for these to dip and accumulate sparingly if they baseline on the hopes of a Day 2 rally.


+++

Cariloha (ALOHA) – February 11, 2022 | 2.3M Shares
Price Range:
$12.00 – $14.00
Offering Size:
$30M
Shares Outstanding:


Industry: Bedding/Linens

Overview:
This company makes bedding an apparel from bamboo products, and a core sales strategy involves marketing partnerships with cruise lines. Their growth numbers are weak, with negative baseline financials, and this is another Roth Capital offering.

Considerations: Hard to find something less appealing: I mean, ok, it’s an alternative material that is probably at least billed as ‘eco-friendly’, but when your key marketing partnerships are all but shut down due to ongoing COVID restrictions, and you have nothing attractive in your financials (ok, we got 61% gross margins), why even attempt an IPO? And the underwriter is Roth?! When things are this bad, I start wondering if something’s up. Gonna have to circle back to this one, but topically, it’s not something I’d like to get in bed with.

Growth Numbers:
– Revenue Growth:
+1.2% for 9 months ending September 30, 2021
– Gross Profits:
+6.7% for 9 months ending September 30, 2021
– Gross Margin:
61% for 9 months ending September 30, 2021

Baseline Financials:
– Cash Flow:
negative – improving
– Net Income:
positive
– Operating Profit:
positive

Notes from the S-1:

Underwriters:
Roth Capital

IPO Classification:
Low Float

Recent Similar IPOs: hmm… maybe VINE: it was so bad it had to crash, and crashed on such a low float that it had to eventually get pumped.

Trading Strategy:
This IPO is gonna bomb unless it’s a hidden Stealth setup. It’s bad enough that perhaps a trading group corners it for a day or two and then pumps it..

Brand Name Recognition:
Low.

Debut Trade Conviction Level:
I don’t envision buying this on the debut under any circumstances, unless I somehow convince myself that it’s a Stealth setup. Probably won’t try to accumulate for a Day 2 pump on this one either… but will be watching the chart, Level 2 buying patterns, and feel it out.

+++

The tru Shrimp Companies (BTRU) – February 11, 2022 | 1.5M Shares
Price Range:
$9.00 – $11.00
Offering Size:
$15M
Shares Outstanding:


Industry: Shrimp Farming

Overview:
This company is being spun off from the Livestok Nutrition Company, and has developed a patented process for farm-raising shrimp that improves viability and reduces grow times. They are building out full-scale farm site in South Dakota under favorable terms, after shunning their hometown state of Minnesota. They also plan to manufacture a shrimp-based biopolymer called “Chitosan” that is used as an ingredient in biomedical and beauty products. This is sort of an interesting company, placing themselves in a market that is largely served by foreign suppliers, so perhaps it will perform well in the long term.

Considerations: Despite my interest in this companies long term prospects, I’m not sure it will attract much initial buying interest given crowded field on Friday when this debuts. It does have a super-low float, so maybe it gets singled out as ‘the one’ to play that day, but I kind of doubt any of these can garner enough attention on their own to pull off a debut run.

Growth Numbers: this company is pre-commercial at this point.

Baseline Financials:
nothing

Notes from the S-1:

Underwriters:
Lake Street/Maxim

IPO Classification:
Low Float

Recent Similar IPOs: this one’s a bit unique

Trading Strategy:
The only thing that makes this interesting for an immediate day trade is the ultra-low float of just 1.5M shares. But I don’t really like the $9.00-11.00 debut price, as there’s simply too much room to fall, and hard to call a bottom if it does drop off the debut. Whereas $4-5 IPOs tend to gain Day 1 support around the $2.80-3.00 level, setting up for a Day 2 run to the high $3s or above, when you start in low double digits, the downside risk tends to persist even when you’re down 30-40%

Brand Name Recognition:
Low.

Debut Trade Conviction Level:
Low. Don’t see any incentive to risk an entry on the debut here.

+++

Sky Technologies (aka SQL Technologies) (SKYX) –
February 11, 2022 | 1.5M Shares
Price Range:
$11.00 – $13.00
Offering Size:
$18M
Shares Outstanding:
75M

Industry: Electrical Equipment

Overview:
Products for light fixtures and ceiling fans, including smart device applications that allow their products to be controlled by smart phones, and the company owns of over 60 US and international patented and patent pending technologies.

Considerations: Highly unprofitable and the low float belies a large volume of outstanding shares. Could get pumped, but not all that interesting on the surface.

Growth Numbers:
– Revenue Growth:
-58% for 9 months ending September 30, 2021
– Gross Profits:
I don’t even know how to calculate this, but they had negative profit of -$130,599 for 9 months ending September 30, 2021, which is an improvement, I guess, over the -$241,363 for 9 months ending September 30, 2021
…Suffice to say, their financials are pretty aweful.

Baseline Financials:
– Cash Flow:
negative
– Net Income:
negative
– Operating Profit:
negative

Notes from the S-1:
Products are manufactured in China.
– History of operating losses
– Heavily dependent on licensing the GE brand name for their products


Underwriters:
The Benchmark Company

IPO Classification:
Ultra Low Float

Recent Similar IPOs: AERC – I mean, it also had pretty bad financials, but hadn’t been in business for nearly a decade and their product got COVID buzz, and was clearly manipulated off the debut.

Trading Strategy:
Ok, so if this is somehow like AERC, and debuts at some ridiculous premium, it’s super risky to try and chase it, but it could go flying. Sometimes when a company looks so bad on paper that it’s laughable, it’s a front for something else… This one might actually be THAT bad. I’ll keep an eye on it, but not really planning on touching it.

Brand Name Recognition:
Low.

Debut Trade Conviction Level:
Low. Don’t see any incentive to risk an entry on the debut here.

+++

Meihua Medical (MHUA) – TBD | 5M Shares
Price Range:
$9.00 – $10.00
Offering Size:
$50M
Shares Outstanding:
0M

Industry: Medical Devices (China)

Overview:
This is the first purely Chinese IPO to debut since the PRC imposed new listing requirements following the DIDI IPO debacle, and while this is not a prominent company, and is unlikely to catch the attention of mainstream Wall St traders, it is a low-float Chinese IPO, and I will be watching it closely. The company manufacturers disposable medical supplies, with modest growth and positive baseline financials, but the financial reporting numbers are rather out of date (citing 2020 vs 2019 financials).

Considerations: Should this one actually complete the IPO process, there will be quite a few eyes on it as the first Chinese IPO since the DIDI debacle (well, LIAN went live too, but a little different). I would think there would be considerable pressure on the company and underwriters not to bring a bomb to the market, but if it doesn’t catch on as a low-float day-trader target, and if it isn’t a Stealth IPO, then there won’t be any buyers and it won’t do well. Also, it would be a pretty ballsy play for the insiders to rip this one with the typical float manipulation we see with Stealth IPOs, given how closely regulators will be watching: then again, China is on New Year’s holiday and hosting the Winter Olympics (not that anyone is really watching), so maybe the setup is primed for a Stealth play.

Growth Numbers:
– Revenue Growth:
+11.8% for 2020 vs 2019
– Gross Profits:
15.4% for 2020 vs 2019
– Gross Margin:
42% for 2020 vs 2019

Baseline Financials:
– Cash Flow:
positive
– Net Income:
positive
– Operating Profit:
positive

Notes from the F-1:

– TLDR (no just kidding, it’s just that this is either a Stealth play, day traders think it’s a stealth play, or it’s a dud): has nothing to do with what’s in the F-1

Underwriters:
Prime Number Capital: they’ve done a bunch of Chinese IPOs, some that went on massive runs months after the IPO, and a few that epically tanked… no massive runs off the debut like we’ve seen other Stealth IPOs pull, but the timing would be pretty good for helping wealthy Chinese get their money out of the grasp of the PRC.

IPO Classification:
Low-Float Chinese

Recent Similar IPOs: well… EBON if we’re lucky, LIAN if we’re not
(haven’t been any purely Chinese IPOs for a while)

Trading Strategy:
This one is tricky: a year ago, all Chinese IPOs were hot: now we’ve gotta be a bit more cautious, though my hunch is that day traders like this one as long as the debut doesn’t get spoiled up to an un-tradeable premium before the opening. So if we get substantial buzz on Twitter, and the debut is like $13-15, perhaps it’s an interesting one to take on the opening debut. If there’s no noise, and the debut is around or below the IPO price, I dunno… could be a flop. I’ll be looking for a constant buy-side imbalance with a healthy, but not overdone premium. Otherwise, probably will just watch.

Brand Name Recognition:
Low.

Debut Trade Conviction Level:
Cloudy: hope for more clarity on the pre-debut crossing.

+++

Ocean Biomedical (OCEA) – Date TBD | 2M Shares
Price Range:
$7.00 – $9.00
Offering Size:
$18M
Shares Outstanding:
32M

Industry: Biotech

Overview:
Pre-clinical biotech focused on cancer. Look, biotech is not a good industry in which to buy IPOs off the debut, and unless you have some deep insights into medicine, are best left to specialists, of which I am not one.

Considerations: I guess I should give this a little more effort than I usually give low-float pharmaceutical IPOs, given how NVCT performed on Monday after demonstrating the typical ‘biotech bust’ move off the debut. But what can I say, it’s low float, it might get accumulated on Day 1 and pumped on Day 2… or it might not. There are a lot of low-float IPOs slated for Friday, and perhaps the worst of the lot will offer pump-groups to control the float and rip it the following week. With just 2M shares, why not this one?

Growth Numbers: pre-clinical, no growth.

Baseline Financials:
see above.

Notes from the S-1:

Underwriters:
Roth Capital (as if I needed another reason not to play this)

IPO Classification:
Biotech Bust

Recent Similar IPOs: NVCT IMMX NRSN

Trading Strategy:
I know, you’re gonna look at those two examples above and start getting excited, but you’ll see that none of them warranted a debut buy-in, and while IMMX and NVCT offered nice Day 2 rips, NRSN has been in a constant downward trend ever since the IPO debut. If you’re feeling a bit of FOMO on OCEA, consider holding off for an opportunity to start a position at $3.20, with the plan to add more than you started with if it dips below $3.00… saving some for additional adds as low as $2.20 if the rip never comes. Or just do like I do, and don’t trade biotechs (NOTE: I did buy some NRSN today at $1.75 because I feel the downside from here is minimal, and they are scheduled to report on several studies at conferences in March 2022, so I’m hoping for some positive news to drive these up.).
As for a more clearly defined trading strategy: add on Day 1, sell any rip on Day 2. Otherwise, wait for a dip below $2.30 to take a play on the QPX around 40 days after the IPO.


Brand Name Recognition:
Low.

Debut Trade Conviction Level:
Don’t do it. If anything, look to find the bottom on Day 1 if you want to try to catch a Day 2 run.


+++

Yi Po International (YBZN) – Date TBD | Float TBD
Price Range:
TBD
Offering Size:
TBD
Shares Outstanding:


Industry: Parking Lot Management

Overview:
This Chinese technology company provides an app that helps drivers find parking spots. They have pretty impressive financials: strong growth, although the numbers are compared to the first 6 months of the pandemic, but still, profitable across all baseline financials. None of that really matters of course: this is a Boustead deal for a Chinese company, and that’s a recipe for explosive moves.

Considerations: I’m not sure this one will be on the calendar for this week, but if they sneak it onto the schedule, and it doesn’t get left off any trading platforms, I’ll be watching closely for a reasonable debut price (as in, prices at $5, debuts at $15). If we get a debut above $20, we probably have to let it go, but anything less and we could be looking at a Stealth IPO setup. Unfortunately, the recent trend has been for these to open trading at like $40, as we saw with TKLF, which gives us retail traders no chance at getting in on an opening rip: and playing a bounce like we saw when TKLF dropped from $30 to $13 before ripping back up to $37 is a dangerous affair (TKLD now trades around $4)… this is not a stock in which you want to exceed your time limit.

Growth Numbers:
– Revenue Growth:
+72.6% for 6 months ending June 30, 2021
– Gross Profits:
+99% for 6 months ending June 30, 2021
– Gross Margin:
74% for 6 months ending June 30, 2021

Baseline Financials:
– Cash Flow:
positive
– Net Income:
positive
– Operating Profit:
positive

Notes from the F-1:
– The only thing I’m really looking at in the SEC filing is for the name of the underwriter… it’s Boustead: ok, put this on watch.

Underwriters:
Boustead

IPO Classification:
Low Float Chinese Stealth IPO

Recent Similar IPOs: TKLF CPOP SOPA

Trading Strategy:
Quite simply, if the debut price is around or under $15, you buy a couple thousand shares, wait for the first couple halts, and start exiting your position. Then if it peaks at like $30+ and drops to a baseline, buy back in at the baseline, and sell the end of day run. You can try your luck again in the early Pre-market the next day if it drops to around $30 again for a Day 2 run up to $70+ (look, I know how ridiculous this all sounds, but it’s happened many times).
If the debut price is like $30+ you can’t touch it. Take your chances with playing any dips from there: sometimes they do bounce, other times, they are simply a deflated balloon. The end of the ride is generally below $2… so keep that in mind if you start asking yourself, “But, how much lower can it really go?”


Brand Name Recognition:
Low.

Debut Trade Conviction Level:
High. As in, from the IPO price, this will almost definitely go sky-high. But if the spike already occurred before the stock starts trading, you have to let it go. is a

Quiet Period Expiration (QPX) Watch:

The SEC mandates that companies and underwriters refrain from making public statements for 40 days after an IPO begins trading. The QPX date marks a time when press releases may be issued that have the potential to move the stock price; especially companies whose price has dropped from the IPO.
These can present great trading opportunities ( I recommend this video here)

Upcoming QPX:
– February 7, 2022: TPG Group (TPG)
– February 16, 2022: Hour Loop (HOUR)
– February 16, 2022: Vigil Neuroscience (VIGL)
– February 16, 2022: CinCor Pharma (CINC)
– February 21, 2022: Hillstream BioPharma (HILS)
– February 21, 2022: Credo (CRDO)

Lockup Period Expiration (LPX) Watch:

Most IPOs are subject to a 180 day lockup period 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.

Upcoming LPX:
– February 8, 2022: Southern State Bancshares (SSBK)
– February 9, 2022: DatChat (DATS)
– February 9, 2022: Dermata Therapeutics (DRMA)

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NOTE: this is not financial advice, and I am not a financial advisor: this information is just my opinion and is for informational purposes only. I may have or take positions in the equities mentioned in this article in the next 72 hours. Trading equities is risky. Do your own research,and trade your own trade.

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