IPOWarriors IPO Preview for October 18 – October 21, 2021

October 20th, 2021

Sorry folks, but I’m on holiday this week, so gotta keep this brief, but even though I’m on vacation, there are still a few IPOs that may prove too tempting to pass up. I’ll go over my thoughts on each of the week’s IPOs

I’ve also uploaded the slideshow from Monday’s Benzinga Pro appearance for your convenience:

Alright, let’s jump in.

Stronghold Digital Mining (SDIG) – October 20, 2021 | 5.8M Shares
This one is pretty much the best setup I can see this week: a US based ‘eco-friendly’ Bitcoin mining operation that helps dispose of scrap coal by burning it in their own power plant to run Bitcoin rigs. Good story, made all the more compelling with BTCUSD running up to all time highs. The low float is the icing on the cake, and it has been offered to RobinHood account holders as well, who a generally advised to hold their allocations for 30 days in order to improve their chances of subsequent IPO participation. Priced above range at $19, the valuation may be absurd, but the story is strong and the float is small, so this one carries a high conviction for me.

Biofrontera (BFRI) – October 20, 2021 | 3M Shares
Repeat from last week – low float, but not all that interested in biotechs right now.

Marpai (MRAI) – October 20, 2021 | 2.7M Shares
Also rescheduled from last week: ultra low float may be enough to push this one, but most IPO traders will be focused on SDIG, and the underlying business here isn’t going to create much buzz (AI driven software for helping companies manage their own self-insured healthcare packages).

Vita Coco Water (COCO) – October 21, 2021 | 11.5M Shares
This one could be interesting, but unlikely to do anything all that dramatic. I’d put in the class of OTLY, which did reasonably well off the debut; driven by loyal customers and riding the healthy-food fad. While OTLY fit a little more closely with the BYND-type of ‘alternative-to-animal-product’ theme, this one is just healthy and tasty. Part of the story might also be an eventual buyout, but in general, food and beverage products don’t rip off the IPO: then again, they don’t generally bomb either, and this one is likely to catch an overnight media cycle that could drive a Day 2 run.

P10 Inc (PX) – October 21, 2021 | 20M Shares
This financial services company has performed very well over the past two years, and is profitable, high revenue growth, and net income/cash flow positive. The only downside is that this is an uplisting from OTC which has already run up over 200% since October 2020 and ran from $7.50 to $11.50 in the last month and a half. Uplistings have a tendency to fall on the debut, as anyone truly excited by this company likely already bought in, so I generally stay away from them. However, this is not always the case, and this one could be an exception… my reasoning here is that financial institutions who are familiar with this company often are barred from owning OTC stocks, and now will be able to take positions.

Portillo’s (PTLO) – October 21, 2021 | 20.2M Shares
As I am not from the Midwest, I have never heard of this restaurant chain, but those who know it, appear to love it, despite the admittedly unhealthy nature of it’s menu. I guessed wrong on FWRG, so maybe regional restaurant chains are good plays (and BROS has done pretty darn well in the coffee sector)… maybe this one turns out to be a winner, but it’s not something I’m familiar with, so not an IPO I’d have enough confidence to play.

Enfusion (ENFN) – October 21, 2021 | 18.7M Shares
This is the kind of IPO that sounds solid, and has the winning combination of growing revenue, gross profits, and positive baseline financials that typically equates to a winning trade. Just 18.7M shares is also a positive. They provide investment management and reporting software to large companies: but my question is whether retail traders can carry this up once it debuts, or will this be a strong company that takes until an earnings report to go up. Probably a safe IPO play if you don’t mind possibly having to hold for a month if it doesn’t run on the debut.

Winc (WBEV) – October 21, 2021 | 5M Shares
If low float IPOs start getting attention again this week, watch MRAI for an indicator… as a vertically integrated wine grower with a subscription based D2C selling model, this has some interesting buzz words and just 5M shares in the float. But it could get drowned out amongst the crypto rally, general market rally, and glut of IPOs on the same day. Interesting to watch, but probably a pass for me even if I was trading on this day (unless I start seeing a bunch of social buzz, then it’s probably a good bet).

Minerva Surgical (UTRS) – October 22, 2021 | 6.25M Shares
Interesting company with very impressive growth numbers, marred only by a potential patent infringement lawsuit… and the fact that medical devices have not done all that well on IPO. It’s a Friday IPO, so see how other low float IPOs have done throughout the week, and gauge social buzz.. if no one’s talking about it, it’s a pass. If there are some excited traders pumping this up, might be worth going along for the ride. Once they announce a settlement or case dismissal, this will probably jump, so even a bag holding position isn’t necessarily a dead trade.

Pending IPO Date:

Cingulate (CING) | 4.4M Shares
Covered this last week.

Aris Water Solutions (ARIS) | 17.6M Shares
Not interested – water treatment solutions for oil rigs in the Permian Basin: horrible financials and less drilling is expected with Oil Prices spiking.

Ventyx Biosciences (VTYX) | 7.8M Shares
Biotech… no thanks.

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