Some interesting IPOs on the calendar ranging from no-name low float debuts to ready-made meme stocks just waiting to test the waters on the public exchange (some as the next chapter in a Lazarus Man move): and amongst all the noise and gimmicks, we look for IPO trades that fit the standard mold of winning debut setups.
Before we get started… I’d like to start live-streaming IPO debuts and trading on YouTube, but need to upgrade my equipment. We’ve already reached $1,590 out of the $2,000 goal. This will also be used in my Benzinga appearances, so if you feel like supporting this cause, I’d greatly appreciated it. The link to donate is here:
Ok, this letter is going out a little bit late this week, and we’ve already seen a few debuts go live, so gonna have to keep this kind of short:
Hertz Global (HTZ) – 11/09/2021 | 37M Shares
We’re still waiting for the debut of this meme favorite, as it completes its round trip from into OTC trading and returns from the brink of bankruptcy. For those who held through the dark times, or sensed the opportunity to buy this under $1 when it got kicked out to the OTC markets under the HTZGQ ticker. Now it’s coming back to life on the NASDAQ with 44M shares being offered at $29/share. The funds being raised will not go to the company, so a follow-up offering is expected imminently, which would usually signal caution, but in this meme-driven market, a frenzy could ensue around this one once it releases the shares and completes the ticker change. I’m really not sure about this one, and have stayed on the sidelines for nearly all of the short-squeeze/meme/recovery plays, so I’m not sure I will change my strategy for this one. I’ll keep an eye on it, but given that it’s been trading pretty actively in OTC markets, the price point may already be stabilized. Not a trade to be made on any premise other than pure social momentum.
Society Pass (SOPA) – 11/09/2021 | 2.8M Shares
This one already debuted a few moments ago, well above the IPO price at $15.50 and into a halt at $18.20. I suspected this might be a Stealth IPO type of play, but WeBull shut off the indication price indicator prior to the debut, so it would have meant flying in the dark. It’s still in its first halt here, on relatively low volume, so this one could make further moves upwards, but the company itself is pretty suspect, so not a long term hold or anything worth chasing.
… in the course of writing this newsletter, SOPA has ripped through multiple halts and is not halted at $33.36
I called this one out on the Benzinga Show yesterday, but missed the entry… oh well… will get the next one.
Third Coast Bancshares (TCBX) – 11/09/2021 | 3M Shares
Another debut that already went live, pretty much trading sideways from its opening print… a little more movement than usual for a bank on debut, but volume has died down and it’s trading below the debut price, so sitting this one out proved to be prudent.
Expensify (EXFY) – 11/10/2021 | 9.7M Shares
This is a fairly well known expense management software that helps businesses and individuals manage spending and expense accounting. More importantly than the impressive revenue growth of 60% in the 6 mos ending June 30, 2021 and gross profit +96% over the same period, is a the trifecta of baseline financial metrics with positive operating profit, net income, and cash flow. With a relatively low float of just 9.7M shares, I like this one for a solid IPO debut.
CI&T Inc (CINT) – 11/10/2021 | 19.4M Shares
Despite frequent YouTube ads highlighting the expertise of this company, I still can’t quite explain what they do, except that they are a consultancy that provides high level engineering services to a global customer base. They have solid revenue and gross profit growth numbers over the last 6 months ending June 30, 2021 (+38% and +32% respectively), but those numbers are in contrast to peak pandemic, and for an engineering firm, that would seem to have a big impact. They are net income positive, but cash flow negative over those same 6 months, and this one just feels like something that will go over the heads of most retail traders. Maybe a solid long term hold, or buy if it debuts below IPO price, for a recovery play, but not all that exciting to me.
FlexEnergy Green Solutions (FLXE) – 11/10/2021 | 3.8M Shares
Rescheduled from last week, not much changed from what I wrote then:
Low float, and green-energy? Kind of sounds interesting, but this producer of gas turbines and heat exchangers for alternative energy is posting financials that are about as bad as I’ve ever seen in an S-1, so I’m not sure even a low float makes it worth trying to game this one. Revenue is down 20% in the 6 mos ending June 30, 2021 with gross profits down 55% during the same period. Oh, and the underwriter is Roth Capital, and for some reason, the market has been giving their IPOs the cold shoulder ever since I’ve been covering IPOs, so I’m not too eager to take the chance on this one being an exception to the rule. No thanks.
Rivian Automotive (RIVN) – 11/10/2021 | 135M Shares
All eyes will be on RIVN when this one debuts, with comps to TSLA and F – and backed by AMZN (and F), this one is likely to debut at a premium, which gives me some pause for caution, given the enormous float of 135M shares. Generally, I stay away from anything with this many shares, but will keep an eye on it.
Weave Communications (WEAV) – 11/11/2021 | 5M Shares
This is a SaaS communications platform for small and medium sized businesses, that claims revenue growth up 54% in the 6 mos ending June 30, 2021 and Gross Profits up 59% over the same period, but again, we don’t know if that is all that meaningful when compared to peak COVID times. With negative operating profits, net income, and cash flow, it seems the main thing going for this one is the low float. And at 5M shares, that’s become less attractive than the 2-3M share floats that have been getting more attention recently.
Backblaze (BLZE) – 11/11/2021 | 6.25M Shares
This is a cloud based data storage company that sounds a lot like Dropbox for small businesses. They have a somewhat loyal customer base with a net retention rate of 114%, but growth is not particularly impressive for a cloud/software company at +24% revenue growth and +14.6% gross profit growth over the 6 mons ending June 30, 2021. They do have positive cash flow, but negative operating profit and net income. Low float could kick in if day traders like this one, but not really super low, so if it gets overlooked, trading could be thin and demand weak.
Mynaric (MYNA) – 11/11/2021 | 4M Shares
This is an interesting sounding company that produces laser-based space communication equipment (lasers in space?!). They have a small number of clients: so revenue is a bit lumpy, which means we have to take the 406% revenue growth in the 6 months ending June 30, 2021 with a grain of salt. Gross profit is up 28% in that period as well, but all baseline financials are negative, so this is not going to be a profitable company anytime soon. It is interesting that the CEO is opting to purchase $75k worth of IPO stock, which is rare, and the float is just 4M shares. So keep an eye on this one.
Lulu’s Fashion Lounge Holdings (LVLU) – 11/11/2021 | 5.75M Shares
Couldn’t find much information on this one, but it is basically a women’s fashion retailer that sells clothes through what appears to be a Shopify storefront. Net revenue and gross profits are up 23% and 32% respectively in the 6 months ending July 4, 2021 and they have been net income positive over that time frame. I don’t see anything particularly attractive about this play, even with 5.75M share float, and in my view, clothing retail and direct-to-consumer IOP plays have been relatively weak unless there is a sort of fanatical brand support (BIRD).
Blue Water Vaccines (BWV) – Unscheduled | 2.2M Shares
Info also scarce on this one: pre-clinical biotech involved with research and development of a longer lasting vaccine for influenza (the common cold). It will be a while before they have any revenue or profits, but it is a Maxim IPO (and they just handled the SOPA IPO that blew up today, although I there are not comparable parallels)
Note: the information contained in this article is not financial advice, and I am not a financial advisor. This is just information to give you ideas so you can do your own research and make your own trading decisions. I will most likely be taking positions in some of the equities listed in this email. Previous success is not an indication of future performance. Trading stocks is risky, you can lose money. Good luck out there.