Over the past week, the market suffered it’s worst stretch since the beginning of the pandemic, yet IPO debuts continue to provide upside trading opportunities: especially mainstream IPOs willing to endure stormy market conditions, and low-float IPOs that debut under constrained volume.
Spotting debut trade opportunities in this market relies heavily on watching the pre-debut indication pricing and volume, where a high debut premium and low volume on the opening trade are the key indicators for low-float, lesser known IPOs, a more modest debut premium with a buy-side imbalance is a positive signal for any mainstream IPOs.
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This Week’s IPOs:
Hanover Bancorp (HNVR) – May 11, 2022 | 1.36M Shares
SaverOne (SVRE) – May 11, 2022 | 1.6M Shares
WYTEC (WYTC) – May 11, 2022 | 3.7M Shares
Bright Green Corp (BGXX) – May 11, 2022 | 158M Shares
SOS Hydration (SOSH) – May 12, 2022 | 1.8M Units
ProFrac Holding (PFHC) – May 12, 2022 | 16M Shares
Intrinsic Medicine (INRX) – May 12, 2022 | 4.16M Shares
Actelis Networks (ASNS) – May 13, 2022 | 3M Shares
Innovative Eyewear (LUCY) – May 13, 2022 | 1.54M Shares
OKYO Pharma (OKYO) – May 13, 2022 | 961k Shares
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Ok, Let’s jump in:
Hanover Bancorp (HNVR) – May 11, 2022 | 1.36M Shares
Price Range: $21.00 – $23.00
Offering Size: $36M
Shares Outstanding: 7.19M
Industry: Local Bank
Overview: This is a regional bank serving the New York City metro area projected to pay a 1.8% dividend. Other than that, it’s simply a regional bank IPO.
Considerations: It’s a regional bank IPO – these are generally fairly priced and rarely offer much volatility on their debut, so I typically don’t trade them. Having said that, low-float IPOs have been targets for trading groups, and at 1.36M shares, the float is small enough to be considered ultra-low float. But with a share price above $20.00, it’s not really the setup that pumpers like to play.
Underwriters: Stephens Inc.
IPO Classification: Local Bank
Recent Similar IPOs: NSTS
Trading Strategy: I don’t trade these – if you want to, then wait for a dip below VWAP and wait with a limit order on the buy side (don’t buy at market or at the Ask). Then sell at VWAP. Most likely a $0.20 winner type of play. Like I said, these rarely move much.
Brand Name Recognition: Low.
Debut Trade Conviction Level: None.
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SaverOne (SVRE) – May 11, 2022 | 2.5M Shares
Price Range: $5.16
Offering Size: $14M
Shares Outstanding: 5.18M
Industry: Mobile App / Automotive Software
Overview: This was rescheduled from last week, with an increased float from 1.38M shares to 2.5M shares along with a price reduction from $7.22 to $5.16: while this makes the price a bit more accessible and reduces the potential for a dramatic drop from the debut (let’s say it will drop to $3.00 regardless, then it’s a reduced difference from the new price to this price). It also diminishes the attractiveness of this as an ultra-low float, though by all standards, the float is still minimal enough to potentially get a pop at some point. The company is an Israeli technology system that restricts the use of mobile devices by drivers in vehicles. It’s an uplisting from the the Tel Aviv Stock Exchange, so I’m not gonna spend too much time discussing this one, since uplistings tend to be a different type of setup than most pure play IPOs.
Considerations: This is an uplisting, and has been rescheduled from last week. The software seems like something consumers would only use if forced to: either by an employer or federal regulations. I may watch this one in case it sells off hard on Day 1, and look for a Day 2 spike: it has been adjusted from an ultral-low float offering to what is still a very low float, and if it gets ignored and trades down at a low volume, then this would provide the right conditions for accumulation on Day 1 and a pump on Day 2 or 3.
Growth Numbers:
– Revenue Growth: +53% for 2021 on $145k in total revenue
– Net Profits: +198% for 2021 on $52k total gross profits
– Gross Margins: 35%
Baseline Financials:
– Cash Flow: negative
– Net Income: negative
– Operating Profit: negative
Notes from the F-1:
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Underwriters: ThinkEquity
IPO Classification: Ultra Low Float, Uplisting
Trading Strategy: I’ll be focused elsewhere on Wednesday, but will keep an eye on this for a potential entry if we see a massive drop that persists throughout the end of Day 1 and look for a possible Day 2 setup.
Brand Name Recognition: None.
Debut Trade Conviction Level: Low
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WYTEC (WYTC) – May 6, 2022 | 3.89M Units
Price Range: $4.25
Offering Size: $18M
Shares Outstanding: 18M
Industry: 5G Networking
Overview: Another rescheduled IPO from last week, this time around they’ve nailed down the offering price at $4.25. This company provides 5G network deployment technology for small cell systems that offer coverage within 1000 feet of a tower. They target their solutions to mobile virtual network operators in the cable industry to bolster their cellular and mobile offerings with WiFi/data/VOIP services.
Considerations: This company is not profitable, not producing positive revenue, and has negative baseline financials across the board. The float isn’t that low, relative to others we have on the docket for Friday, and I’m not sure there will be much day-trading interest on this one. However, we have seen quite a bit of interest in recent low-float IPOs in the past week, and Tuesday saw quite a few recent low-float IPOs make rebound runs (OST, HLVX, JCSE, RVSN…) so maybe the trend can bleed into some interest in a debut play, but that’s a long shot.
Growth Numbers:
– Revenue Growth: -11.7% in 9 months ending September 30, 2021
– Gross Profits: +26% in 9 months ending September 30, 2021
– Gross Margin: 15%
Baseline Financials:
– Cash Flow: negative
– Net Income: negative
– Operating Profit: negative
Notes from the S-1:
Underwriters: EF Hutton
IPO Classification: Low Float IPO
Recent Similar IPOs: MTEK
Trading Strategy: This one has units and the float isn’t that low: so it would need social buzz to send it on a debut run. Given that Boustead has an IPO offering on Friday, I think low-float IPO scalpers will be focused on that one instead of WYTC. I’m not particularly interested in this one until it bottoms out as a possible LPX move when the lock-up expires.
Brand Name Recognition: None.
Debut Trade Conviction Level: Low
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Bright Green Corp (BGXX) – May 11, 2022 | 158M Shares
Price Range: ~$4.00
Offering Size: $7.6M
Shares Outstanding: –
Industry: Cannabis
Overview: This is a pre-revenue company that sells cannabis products in the US. They are still waiting on federal licenses, which potentially could be a huge catalyst for the stock, assuming those are granted, but it’s a risky move and ultimately a very crowded space. This is a direct listing, so the company itself will not be raising any funds from the IPO.
Considerations: This is a direct listing with a really high float and not a very big offering, so I’m curious to see where the shares price at. Given the float and direct offering, it’s not something I want to get in on. Cannabis stocks aren’t in vogue right now, and the market is pretty flooded, so I don’t see any reason to rush into this one on Day 1. It could be an interesting play if it bottoms out before dropping any headlines, but with a triple-digit float, it doesn’t really look like something I’d usually trade.
Growth Numbers: It has no revenue
Baseline Financials:
– Cash Flow: negative
– Net Income: negative
– Operating Profit: negative
Notes from the S-1:
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Underwriters: EF Hutton
IPO Classification: Direct Listing
Recent Similar IPOs: Can’t really think of any direct listings in the weed space with this kind of float.
Trading Strategy: Stay away.
Brand Name Recognition: Low.
Debut Trade Conviction Level: Low
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SOS Hydration (SOSH) – May 12, 2022 | 1.8M Units
Price Range: $4.50 – $6.50
Offering Size: $13.6M
Shares Outstanding: 7.49M
Industry: Health Supplement / Sports Drink
Overview: Yet another IPO rescheduled from last week (this is at least the third time it’s been on the calendar). This is company has developed a hydration product based on the WHO’s rehydration formula with enhancements that they claim improves absorption and performance of the product. They do have a retail presence in large retail chains such as CVS, Walmart, and Whole Foods, along with online sales on sites like Amazon.com and Target.com. So this is like, actually a real company with revenue and a product that generally has very high customer ratings for its performance. Whether the market is ready to be enthusiastic about buying into the debut is another question.
Considerations: Rescheduled from last week (and the week before then and the week before that): not much has changed – except for a slightly larger float: having been increased from 1.36M units to 1.8M units, and it is still offered for allocation request on WeBull, so it seems they must be struggling to fill their order book.
Last week I wrote,
“I’ll have to defer to social media throughout the week to get a sense as to whether retail traders are likely to get behind this one at all. With just 1.36M shares (plus an equal number of warrants), and a limited number of total shares outstanding, this one could get pumped simply as an ultra-low float IPO. But I’m not sure it’s sexy enough to warrant a debut buy: so I’ll be watching the pre-debut indication and most likely, just waiting to see if it drops into an attractive price range for a subsequent rebound.”
Given the attention STSS no doubt stirred up with its Day 3 run, this one may get played out. The float is tiny, and food stocks are in vogue right now, so maybe I should pay attention to the debut on this a little more. If we see strong buy-side demand perhaps it can run.
Growth Numbers:
– Revenue Growth: +54% in the 9 months ending September 30, 2021
– Gross Profits: +42% in the 9 months ending September 30, 2021
– Gross Margin: 37% in the 9 months ending September 30, 2021
Baseline Financials:
– Cash Flow: negative
– Net Income: negative
– Operating Profit: negative
Notes from the S-1:
Underwriters: Maxim Group
IPO Classification: Ultra-Low Float
Recent Similar IPOs: OTLY
Trading Strategy: I’ll be paying attention to social media this week, as sometimes a cult-brand IPO gets enough support from its target consumer base and loyal customers to run it: think DNUT, BIRD, BROS, etc.
The float is so low that it may not drop as hard as others, especially given that it appears to have at least moderate brand name recognition. If it doesn’t perform well at all on Day 1, it could be a very interesting Day 2 setup, as this one actually could benefit from an overnight media cycle. I believe many of its loyal customers won’t be aware of the IPO until it the day after it debuts and headlines announce its IPO performance: so a Day 2 run is very possible.
Brand Name Recognition: Moderate
Debut Trade Conviction Level: Not high, but not completely disinterested. Seems like it could get enough support from a loyal customer/fan base to give it some legs.
Live Debut Streaming: https://www.youtube.com/watch?v=kY6V6_Hclgo
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ProFrac Holding (PFHC) – May 12, 2022 | 16M Shares
Price Range: $21.00 – $24.00
Offering Size: $441.6M
Shares Outstanding: 34.9M
Industry: Oil/Energy
Overview: So this one actually qualifies as a mainstream IPO, with a top-tier underwriter and it’s in the energy/oil space, which is one of the few sectors that has been holding it’s ground in this market due to pressure on oil prices in relation to the war in Ukraine and sanctions on Russian supply. This company provides services to upstream oil companies related to fracking, which has received a lot of bad press in regards to environmental impacts, but may be unavoidable in the current political/economic environment.
Considerations: Given demand for gas and oil, this is one appears to be perfectly timed to current geopolitical issues. I would compare this one to the EE IPO which debuted back on April 13, 2022 though perhaps this company is a bit more competitive in their respective field. The overall market is still reeling, and so any mainstream IPO that debuts in these conditions is going to have to provide a strong case for institutional investors to consider anchoring the deal, and the float is not all that large for a traditional IPO. I don’t really expect retail traders to pile into such an IPO on the debut, so this one may end up pricing below range and opening or dipping below that, in which case I’d be looking for a reversal as a possible trade setup.
Growth Numbers:
– Revenue Growth: +43% for 2021 vs 2020
– Gross Profits: -63.8% for 2021 vs 2020
– Gross Margin: 25.8%
Baseline Financials:
– Cash Flow: positive
– Net Income: negative – improving
– Operating Profit: negative – improving
Notes from the S-1:
Underwriter: JP Morgan
IPO Classification: Mainstream
Recent Similar IPOs: EE
Trading Strategy: I feel that JP Morgan tends to leave some meat on the bones for retail traders to get some action on the debut, but will take care of their IPO buyers first. Given the current market conditions, this one is likely to price at the low end of the range, if not lower to ensure IPO buyers don’t take a bath right off the debut. From there, we’ll have to see how much demand there is from retail: a slight debut premium with a strong buy-side imbalance would be an indication for a possible debut entry. Anything else, and waiting for a dip down to the IPO price would be a reasonable trade setup.
Brand Name Recognition: Low.
Debut Trade Conviction Level: Moderate.
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Intrinsic Medicine (INRX) – May 12, 2022 | 4.16M Shares
Price Range: $5.00 – 7.00
Offering Size: $25M
Shares Outstanding: 11.3M
Industry: Biotech
Overview: This is a pre-clinical biotech that is in the process of developing treatments for gastrointestinal diseases such as IBS-C and IBS-D. They are not yet in Phase I testing for any candidates.
Considerations: Not super-low float, and it’s a biotech, so I’m not gonna try and trade this one. If it drops hard enough on Day 1 and Day 2, maybe it becomes a target for a pumper, but there are other lower-float candidates on the calendar, so I’m not sure I’ll take a chance on this one.
Growth Numbers: pre-clinical, so no revenue
Baseline Financials:
– Cash Flow: negative – improving
– Net Income: negative – improving
– Operating Profit: negative – improving
Notes from the S-1:
– “This prospectus covers the possible resale by the Selling Stockholders identified in the table below of up to 13,615,470 shares of our common stock”
So basically, up to 13.6M additional shares may be sold by existing share holders immediately after the IPO… which means the ‘low-float’ of the IPO is basically negated, and any run in the share price could be sold-off immediately.
Underwriters: Spartan Capital and Revere Securities
IPO Classification: Low-float Biotech
Recent Similar IPOs: BLTE… except the additional shares clause makes this one unique in a not very appealing way.
Trading Strategy: I simply don’t like that clause that allows existing shareholders to sell off over 3x the float. Perhaps Spartan finds a way to pump this one along the lines of how they managed to squeeze ALZN from a $5.00 pricing to a $29.00 debut that sold off from the open: it now trades at $0.97. Think it’s a setup I’d rather avoid altogether.
Brand Name Recognition: Low.
Debut Trade Conviction Level: Low.
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Actelis Networks (ASNS) – May 13, 2022 | 3M Shares
Price Range: $4.00
Offering Size: $16M
Shares Outstanding: 15.6M
Industry: IoT (Internet of Things)
Overview: Also rescheduled from last week, this is a network solutions company with a proprietary hybrid fiber-copper technology that provides a flexible solution for areas regardless of whether they can easily be reached with fiber-optic solutions. But that’s not really why anyone is paying attention to this one: it’s a Boustead deal, and they tend to figure out ways to run their offerings, so people will watch, some will buy off the debut, and if we get anything other than volatility off the debut we will be surprised.
Considerations: Well, it’s a low-float Boustead deal. That’s generally enough to bring attention to this one. While it was reschedule from last week, reports I’ve received from traders with direct brokerage accounts is that it was due to some questions from the SEC: which may sound a bit dodgy on the surface, is perhaps better news for those hoping for a ‘Boustead Special’ than lack of retail demand.
Growth Numbers:
– Revenue Growth: +0.2% for 2021 vs 2020
– Gross Profits: -20.3% in 2021 vs 2020
– Gross Margins: 46%
Baseline Financials:
– Cash Flow: negative
– Net Income: negative
– Operating Profit: negative
Notes from the F-1:
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Underwriters: Boustead Securities
IPO Classification: Boustead
Trading Strategy: I’ve put in an allocation request for this one on WeBull – if we get a debut premium, I’ll probably sell on the debut. I’m not so sure this one has much upside as a debut trade. Boustead has delivered a couple duds recently, and the runners have had clear ties to Asia or other foreign entities (AKAN was tied to Lesotho). This one might be one where I just sell any allocation I get if given a chance to take profits, and otherwise put this one on watch for a longer term LPX play.
Having said that, it is a Boustead deal, and it does have a low-float, so it’s not crazy to think that retail traders who have become accustomed to Boustead delivering rips off the debut pick up on this one and send it into at least one halt with an open to the upside. I just feel like it’s pretty risky to hold any longer than that.
Brand Name Recognition: None.
Debut Trade Conviction Level: Low
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Innovative Eyewear (LUCY) – May 13, 2022 | 1.54M Units
Price Range: $5.50 – $7.50
Offering Size: $10M
Shares Outstanding: 7.7M
Industry: Wearable Technology
Overview: This company produces glasses that feature microphones and open-ear audio technology that connect to devices via bluetooth. Dubbed as ‘smart audio glasses’ – they sell under the brand name “Lucyd” (https://www.lucyd.co) and are endorsed by a number of lesser known professional athletes such as WNBA player, Monique Billings. The IPO is selling Units that consist of one share of common stock and 2 warrants (a Series A and Series B warrant).
Considerations: As far as the product goes, I dunno, kinda bulky and gimmicky in my opinion. Are these the next GoPro or Beats-by-Dre? I doubt it. Perhaps they can upgrade to further advancements in the future: augmented reality would be a logical progression, but in the current format, I don’t think they are interesting enough to generate enough buzz to warrant a debut play. The ultra-low float plus warrants makes this an interesting setup for a possible Day 2 run, but that’s about the only angle I can see on this one other than a longer term LPX play: this one does have a low float even when taking the total shares outstanding into account.
Growth Numbers:
– Revenue Growth: 1136% for 9 months ending September 30, 2021
– Gross Profits: up to $86k in 2021 from -$17k in 2020
– Gross Margin: 20%
Baseline Financials:
– Cash Flow: negative
– Net Income: negative
– Operating Profit: negative
Notes from the S-1:
– Series B warrants expire within 1 year, and the company does not intend to list them on any exchange.
– Lucyd Ltd. will control roughly 65% of the stock upon completion of the offering
Underwriters: Maxim Group
IPO Classification: Ultra Low Float
Recent Similar IPOs: LCFY
Trading Strategy: This one doesn’t really look like a debut trade to me: don’t see any reason to believe it’s a Stealth IPO, and don’t expect it to get much retail interest. On top of that, market conditions are bordering on panic mode at the moment, so I’m expecting very low volume on this one and generally downward movement. This might setup a Day 2 pop, but even that depends somewhat on there being solvent day traders in the market to give it a boost.
I’ll be watching this one for a possible LPX run down the line. With Series B warrants on a 1 year expiration, it seems they’ll be wanting to run this back to the IPO price at some point before then.
Brand Name Recognition: Low.
Debut Trade Conviction Level: Low.
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OKYO Pharma (OKYO) – May 13, 2022 | 961k shares
Price Range: $4.50 – $6.50
Offering Size: $10M
Shares Outstanding: 22.11M
Industry: Biotech
Overview: This is a British pre-clinical biotech with a pipeline of candidates that address inflammatory eye diseases and ocular pain: examples include a treatment for dry eye that is poised to enter Phase I testing.
Considerations: The float on this one is so low that it appears to be almost begging day traders to pile in, and the price certainly invites speculation, so it could be interesting just on the setup alone. According to the prospectus, their lead candidate could skip Phase I safety trails and proceed to Phase 2 by the end of 2022: which would present a clear catalyst for an upside move if (when) this stock drops from the IPO price.
Growth Numbers: none
Baseline Financials: none
Notes from the F-1:
– We were originally incorporated in the British Virgin Islands as a British Virgin Islands Business Company on July 4, 2007 under the BVI Business Companies Act 2004 with company number 1415559 under the name Jellon Enterprises, Inc.. Our legal and commercial name was changed to Minor Metals & Mining, Inc. on October 24, 2007, to Emerging Metals Limited on November 28, 2007, to West African Minerals Corporation on December 9, 2011, and to OKYO Pharma Corporation on January 10, 2018. On March 9, 2018, shareholders approved the cancellation of our AIM listing and migration to Guernsey.
I mean, this sounds super sketchy, but perhaps as a shell company it makes sense?
– Our website address is www.okyopharma.com. The reference to our website is an inactive textual reference only and the information contained in, or that can be accessed through, our website is not a part of this registration statement.
So what you’re saying is, you have a website, but the information on the website is possibly not accurate?
Underwriters: ThinkEquity
IPO Classification: Ultra Low Float ( about as low a float as I’ve seen)
Recent Similar IPOs: LCFY
Trading Strategy: This is such a low float that it will be interesting to watch where it opens. If it gets pumped up to a small debut premium, it could be ready to run, if the debut is up in the $10+ range, I’d be pretty weary of any continued upside, and don’t se
Brand Name Recognition: Low.
Debut Trade Conviction Level: Moderate.
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