Stealth IPOs are risky debuts that are typically introduced without much promotion and are announced just prior to their debut. We’ve seen debuts like WNW, UTME, TIRX, and rocket off their debuts, while others like JZXN fall straight from $45 to $17.
The key to playing these debuts is to avoid insane debut premiums, and EXPECT an upward halt out of the open. While a debut premium of 100-200% may seem extreme for most IPOs, its’s somewhat expected for Stealth IPOs, but if we see a debut premium of 500% or more, whatever scam is behind these pumps has likely already been baked in, and the stock is not going to offer much upside. Still, even a highly pumped debut premium like JZXN offered a brief window for quick hands to exit their position for a small win. Again, if the stock does not immediately halt upwards, you need to get out…
Ok, so now for the background on tomorrow’s Stealth Watch IPO…
The stock I have identified as a potential stealth launch, is a Chinese entertainment company that promotes hip-hop through events both online and in live venues. In fact, this probably doesn’t really matter as much as the fact that this company’s IPO is underwritten by Network 1 Financial – the same company that brought us TIRX, AUVI, and others like last week’s ACXP… which didn’t halt but gave a nice day-long win as it ran from $5.95 to over $8.00.
Furthermore, this relatively unknown company did $19M in revenue in 2019 with $3M in profit, and even during the 2020 pandemic did $15.6M in revenue and $2.6M profit. With a relatively low float of just 6M shares, this one is primed to ‘pop’ off the debut, so keep an eye out for Pop Culture Group (CPOP) tomorrow morning – I expect it will debut rather early, as we have a full slate of IPOs including some blockbuster names that will take longer to pair trades.
Anyway… Good luck out there.
NOTE: This is not financial advice and I am not a financial advisor. I do intend to take a position in this security within the next 72 hours, and reserve the right to change my mind at any time. This is for informational purposes only – trade your own trade, and good luck!