For the past few weeks, we’ve seen certain trends emerge that have become somewhat predictable: growth + positive financial stability across net income and cash flow have been solid foundations for runs, low float plays have done well, and the rest are too risky to bet on. I’ve been a little bit too eager to play debuts that fell outside of these parameters: this week, I’ll be aiming for better discipline.
Let’s jump in:
Healthcare Triangle (HTCI) – October 13, 2021 | 4.62M Shares
This has been on the calendar for three weeks now, and continues to get pushed back: this week, the underwriters cut the float in half, and we’re not looking at a low float play that might finally be in a range where they can take it live. To recap, this cloud and data management software company provides SaaS products to healthcare and life sciences organizations. Over the past 6 mos ending June 30, 2021, revenue is up 20% and gross profits are up 32%, which are not bad numbers, but not amazing for a SaaS product: and their baseline financials for operating profit, net income, and cash flow are all negative. I tend to shy away from a tri-fecta of losses on those fronts unless there is strong brand name recognition, or something else compelling to the offering. Now that the float is down below 5M shares, maybe it becomes a day trader’s taget: it’s STILL available on WeBull, so I’ll wait to see what kind of allocations people get, but I’m not particularly excited about this one.
Biofrontera (BFRI) – October 13, 2021 | 3M Shares
This is a biotech with a skincare product that treats over-exposure to the sun (sunburns?). Doesn’t have very strong financials, and was very weak during the pandemic, slightly recovering, but still, not much to get exciting about. The only real interest here is the 3M share float: so if it gets pumped on social media, then maybe it’s a play, but otherwise, I’ll stay out of this one.
AvidXchange Holdings (AVDX) – October 13, 2021 | 22M Shares
This company provides accounts payable software on a SaaS platform with revenue up 33% in the 6 mos ending June 30, 2021 and gross profits up 52% in the 6 mos ending June 30, 2021 – strong growth metrics, but not particularly exciting… at least not exciting enough to offset negative operating profit, negative net income, and negative cash flow.
Lucid Diagnostics (LUCD) – October 14, 2021 | 5M Shares
NOTE: This is NOT Lucid Motors… this is a medical device company developing a machine for testing esophageal cancer indicators. They are not generating revenue, and the only possible catalyst for retail trader’s attention is the low float of 5M shares. But without a very buzz-worthy niche, I’m gonna take a pass on this one.
IHS Holdings (HIS) – October 14, 2021 | 22.5M Shares
This company buys and manages communications towers in developing markets: recent acquisitions include over 1000 towers in each Brazil and Kuwait. With revenue up 15% in the 6 months ending June 30, 2021 and Gross Profits up 59% over the same period (on 47% gross margins), this company has solid financials, bolstered by positive operating profits, net income, and cash flow positive. The only red flag for me on this one is that insiders are selling 4.5M shares as part of the IPO offering, but otherwise, this is a strong looking play on a fairly priced IPO compared to direct competitors.
Gitlab (GTLB) – October 14, 2021 | 10.4M Shares
This is a high growth SaaS play in a high growth market: GitLab is a direct competitor to Microsoft’s GitHub: offering more customizable features and appealing to customer’s individual preferences. Revenue is up 69% in the 6 months ending July 31, 2021 and 67.88% over the same period: these are the kind of growth numbers that can justify losses across cash flow, operating profit, and net income. This will get media attention, and is operating in a very attractive growth market … I expect this one to command a high IPO price, and likely will debut at an inflated premium. Still, with just 10.4M shares, and ample media coverage, I expect this one will provide a decent win opportunity, and plan to play this one off the debut.
Marpai (MRAI) – October 15, 2021 | 2.7M Shares
Being billed as an AI driven managed healthcare solution for self-insured companies, and underwritten by ThinkEquity, the ultra-low float is enough to warrant some attention with just 2.7M shares, but ultimately, I don’t think this will generate enough buzz or interest from retail traders, and will pass based on the poor financials and lack of conviction.
Pending IPO Date:
Cingulate (CING) | 4.5M Shares
Having rescheduled from last week, here we have a pharmaceutical company developing improved drug delivery technology for ADHD treatments for drugs that are already approved. I don’t know much about this, though I’ve read confirmations that poor release times are a pain point for ADHD medication, and would need to see a significant interest from social media traders to give this one a shot. As for me, I’m not sure it will hold my attention, nor that of other traders. Probably a pass (again).
Augmetix (AUGX) | 6.7M Shares
This uplisting briefly appeared on the trading calendar last week, and is now moved to this week with the date not firmly established. The company provides a software that allows doctors to directly annotate their live and virtual patient consultations via a phone app that allows for more efficient record-keeping. Companies like Doximity (DOCS) have been really hot recently, so maybe this catches some interest as a proxy play, and revenue is up 30% / gross profits up 56% in the past 6 months ending June 30, 2021 – so there is a growth story here. Unfortunately, they are also expressing losses across operating profit, net income, and cash flow. The float is small at just 6.7M shares, but probably not small enough to attract significant retain interest, so I’m not sure this moves much when it does go live. Uplistings have been hit and miss, so I’ll probably sit this one out.
Paragon 28 (FNA) | 7.8M Shares
This one has only appeared on one IPO calendar, so I’m not sure it’s going to debut this week, and information is rather scarce. I have no reason to believe this is a ‘Stealth IPO’, and nothing else seems particularly exciting about it. From what I understand, they make 3D printed implants that are custom made for each patient, implantable plating systems that re-enforce damaged feet/ankles, and other products that exclusively focus on foot and ankle reconstruction. It all sounds kind of cool actually, but I doubt the market is going to get super excited about this one, so in this market, it’s not all that appealing to me as a debut play.
I’ll be keeping an eye on the IPO calendar throughout the week to see if anything gets added to the schedule, and will post updates to my Twitter feed as they come. If there’s anything super exciting, I’ll send out a followup newsletter, but otherwise, please feel free to join us in the IPO Warriors Reddit Thread for ongoing discussion regarding recent IPOs, upcoming IPOs, and live trading on the day of every IPO:
NOTE: The information contained in this publication is NOT financial advice, and I am not a financial advisor – this is meant for informational purposes only. Trading stocks is risky – you can lose money, and previous performance is not an indicator of future results. Trade responsibly, and do your own due diligence, research, and analysis to supplement what you learn from other sources in your trading community. Good luck out there.