Another week with a light IPO calendar, with just a single IPO slated to debut: but with an ultra-low float, no warrants, and an underwriter that has given us some volatile stealth setups in the recent past, at least we have some excitement to look forward to.

On top of that, we’ve seen low-float stocks take the spotlight again this week, with recent low-float IPO AERC, with just over 4M shares in the float, embarking on a monster two day run that saw the stock rally from around $2.50 at the start of the week to a high of $15.25 by Tuesday’s after-hours session. JAN followed suit on Tuesday, with a jump from $2.50 at the close on Monday, to touch $5.00 on Tuesday’s headline; closing at $4.07 with high hopes that it will reproduce AERC’s type of Day 2 fireworks.

So with low-float in focus, keep an eye out for PR drops on any recent low-float IPOs this week: it won’t take much of a catalyst to send them running, and if we see JAN’s momentum carry over into Day 2, then significant headlines can be traded across multiple days.
With that in mind, I’m extra-excited about this week’s low-float IPO debut.

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SHOUT OUTS:

• Lockup Expiration Section: We are welcoming Aly Angel to the IPO Warriors newsletter starting this week. Many of you know her as @tradingfitgirl on Twitter: for those who don’t, she is a highly analytical swing trader with a focused strategy around trading recent IPOs around their lockup expiration (“LPX”). Her strategy is relatively low-risk with high upside potential, and worth understanding if not directly playing them. She has produced in-depth guides that can be purchased on her website here.
  

• Support Dog Rescue Efforts in Ukraine: Simply by streaming the songs on TheSound.com’s Spotify account, you can generate revenue for projects that help dog rescue efforts. Our current support is going towards PawsofWar.org

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This Week’s IPOs:

• Phoenix Motors (PEV) – June 8, 2022 | 2.5M Shares
  

  —> LIVE STREAMING PEV on June 8, 2022 at 9:40 AM EST here:
  
  https://www.youtube.com/watch?v=wGxKEIZhZfk
  
  Subscribe to the IPO Warriors YouTube Channel and set your reminder to join me and Aly Angel for a live stream trading session for Phoenix Motors (PEV) – should be volatile, if nothing else!

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Ok, Let’s jump in:

Phoenix Motors (PEV) – June 8, 2022 | 2.5M Shares
Price Range: $7.00 – $9.00
Offering Size: $21M
Shares Outstanding: 20M

Industry: Electric Vehicles

Overview: This company produces integrates electric drive systems into light and medium duty trucks: namely the Ford F450, and sells EV chargers to the residential market, along with leasing services. The company is profoundly not profitable have sold only 104 EVs in the history of the company, with financials that are about as bad as you could imagine: it really looks like the kind of company that missed out on the EV craze of 2020 and sounds so shady that it would have fit right in with taking the SPAC route alongside NKLA. This IPO was originally filed in November 2021, and is technically a spin-off from SPI Energy Co – with Roth Capital, Maxim, and EF Hutton lined up as the underwriters, and the S-1 was refiled in February 2022 at 4M units that included a share and a warrant.
Recently, Prime Number Capital took over as the sole underwriter, and removed the warrant while reducing the float to just 2.5M shares.

Considerations: This is one of those IPOs that is just so bad on the surface that I can’t help but be intrigued. The company is losing money at an accelerating pace, and EV stocks have taken a hit along with most growth/non-profitable stocks over the past three months. Dumping Roth/Maxim/EF Hutton as underwriters for Prime Number Capital certainly sets off the alert for a potential Stealth IPO play: for those of you who remember, MHUA and OST both were represented by Prime Number, and offered volatile debuts with significant win potential off debut buy-ins.
One point to consider is that PEV has been available on WeBull for pre-order allocation for about a week: so was OST, and allocations were generous, but not fully filled… so I’ll be keeping an eye on how much of my allocation request gets filled to gauge what kind of effect a large retail position might have on the opening move once this one starts trading.
I doubt the fact that this is an EV company is going to have much of an impact on the demand for this IPO – but the fact that the float is just 2.5M shares is likely to be enough to draw attention to this debut. Given the focus on low-float trades this week, the timing in this regard is perfect: so if the underwriter/insiders pulls their usual shenanigans, and restricts the volume on the opening debut – then we should see some highly volatile moves in the opening minutes: halts almost certain, though which direction they move will be determined by the initial opening price and how many retail traders dump their shares early.
Another hint that we may be looking at a Stealth IPO setup, is the heavy presence of Chinese executives in both Phoenix Motors and the parent company that is spinning off this IPO… (most Stealth IPO setups involve direct or indirect ties to China).

Growth Numbers:
– Revenue Growth: -55% for 9 months ending September 31, 2021
– Gross Profits: -56% for 9 months ending September 31, 2021
– Gross Margin: -9% for 9 months ending September 31, 2021
Baseline Financials:
– Cash Flow: negative – expanding (getting worse)
– Net Income: negative – expanding
– Operating Profit: negative – expanding

Notes from the S-1:
– 180 days after the date of this prospectus due to contractual obligations and lock-up agreements between the holders of these shares and the underwriters. However, the underwriters can waive the provisions of these lock-up agreements and allow these stockholders to sell their shares at any time, provided their respective one-year holding periods under Rule 144 have expired.
So like, get ready for the float to balloon whenever the underwriter feels like it’s reached a high enough point to dump stock.

Underwriters: Prime Number Capital

IPO Classification: Low Float (potential Stealth setup)

Recent Similar IPOs: OST MHUA

Trading Strategy: IF this turns out to be a Stealth IPO setup, then we’re almost certainly going to see a strong debut premium: with an initial opening trade likely to be priced anywhere from $13 to $45. If we see the lower end of this spectrum with a buy-side imbalance, then I’ll be inclined to add to whatever allocation I receive and trade this aggressively across all my accounts.
If this indicates below the IPO price – which is expected to come in at $7 – then perhaps I completely misread this one, and it would then be up to day traders to pump this one purely based on speculation and low-float: which might be good for a halt at some point, but will be a

Brand Name Recognition: Low.

Debut Trade Conviction Level: High.

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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.

LPX dates June 6th to June 17th

90-Day, 120-Day and 180-Day LPX

Marygold Companies (MGLD)
Type: OTC Uplist
LPX Date: 08-Jun-22
LPX Period: 90 Day
IPO Date: 10-Mar-22
IPO Price: $2.00

Exercise Price of Common Shares: 120% list price equal to $2.40
Secondary Offering Exercise Price:

Notes: ticker ran to EP in pre-market on June 3rd. Also states a 180-day LPX for Dir & Ofc
– Reference 424B4 Filed 11-Mar-22

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Akanda Corp (AKAN)
Type: IPO

LPX Date: 13-Jun-22
LPX Period: 90 Day
IPO Date: 15-Mar-22
IPO Price: $4.00

Exercise Price of Common Shares: 125% list price equal to $5.00
Secondary Offering Exercise Price:

Notes: ticker has 2m sh out of LPX at 90 days and has a leak-out for remaining
– Reference 424B4 Filed 16-Mar-22

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The Arena Group (AREN)
Type: OTC Uplist

LPX Date: 09-Jun-22
LPX Period: 4 Month
IPO Date: 09-Feb-22
IPO Price: $8.25
Exercise Price of Common Shares: $10.00

Notes: 90- and 120-day LPX dates

– Reference 424B4 Filed 14-Feb-22

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Creative Medical Technology (CELZ)
Type: OTC Uplist

LPX Date: 06-Jun-22
LPX Period: 6 Month
IPO Date: 06-Dec-21
IPO Price: $4.13
Exercise Price of Common Shares: 110% of IPO equal to $5.1875
Secondary Offering Exercise Price: S-3 effect 19-May-2022 15m sh @ $2.25 EP $2

Notes: ticker hit EP at day 112, has secondary

– Reference 10Q Filed 13-May-22, 424B3 Filed 20-May-22

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Cingulate Inc. (CING)
Type: IPO

LPX Date: 06-Jun-22
LPX Period: 6 Month
IPO Date: 08-Dec-21
IPO Price: $6
Exercise Price of Common Shares and warrants: $6 & $7.50

Notes: 424B4 20-Apr-22 selling sh for warrant exercise at $6

– Reference 10Q 12-May-22, 424B4 20-Apr-22

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NeuroSense Therapeutics Ltd. (NRSN)
Type: IPO

LPX Date: 07-Jun-22
LPX Period: 6 Month
IPO Date: 09-Dec-21
IPO Price: $6 sold as units
Exercise Price of Common Shares and warrants: $6 equal 100% of the IPO price per Unit

Notes: ticker hit EP’s at day 102
– Reference 20F 14-Apr-22

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IPOs that hit 180-day LPX dates in the last 30 days, but have not run to EPs

Check date if there’s a secondary offering, as these take longer to run.

AERC, 23-May-22, currently walking up
STRN – EP $4.81 – $5.18 *has secondary
BJDX – EP $7 & $10
BEAT – EP $6
TIVC – EP $6.25

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For a full list of IPOs and Uplist LPX dates and video reviews https://tradingfitgirl.net/always-learning for the direct Spreadsheet Link