The IPO Buzz: Credo Technology Leads January’s Last Run

Credo Technology Group Holding Ltd. (CRDO proposed), a semiconductor connectivity solutions provider, is the name to note as January 2022 enters its final week. Credo is the only large deal on this week’s IPO Calendar – in a market frozen by fear of rising interest rates ahead and inflation at a 40-year high. The NASDAQ and the S&P 500 just had their worst weeks since March 2020 when the COVID-19 pandemic lockdowns began.

Just seven deals – mostly small-cap IPOs – are on tap this week. Bankers expect to raise about $567.5 million. This line-up could be seen as a sign of cautious optimism after last week, when no IPOs were priced after the stock market’s sell-off pushed the NASDAQ into correction territory. Two big IPOs were postponed and smaller ones were delayed. Eight SPACs started trading last week, including one that was priced ahead of the long Martin Luther King, Jr. holiday weekend.

“Modest interest” in the Credo deal is giving the IPO market a pulse this week, a veteran IPO trader says.

Connecting the Chips

Semiconductor sector buyers are enthused about Credo’s IPO. The company’s customers include Microsoft and other denizens of the data infrastructure market. Credo, founded in 2008, supplies the chips, the line cards, the electric cables and technology solutions to data infrastructure operators and 5G wireless service providers. The company is based in the Cayman Islands.

“Our innovations ease system bandwidth bottlenecks while simultaneously improving on power, security and reliability,” Credo says in its prospectus.

Credo is planning to offer 25 million shares at $10 to $12 each to raise $275 million, if the deal is priced at the mid-point.

BlackRock is among the cornerstone investors whose indications of interest account for up to nearly 44 percent of Credo’s IPO, according to the prospectus.

Goldman Sachs, BofA Securities, Cowen, Mizuho Securities, Needham & Co. and Stifel are the joint book-runners of Credo’s IPO.

For the last 12 months, Credo reported a net loss of $24.9 million on revenue of $70.4 million for the last 12 months.

Wrapping Up January

Healthcare and home improvement are the dominant sectors represented by the six other companies on this week’s IPO Calendar. Let’s take a look.

In the healthcare arena, there are three small-cap deals – two IPOs and one NASDAQ uplisting:

  • Jupiter Neurosciences (JUNS proposed)This small biotech, focused on developing a drug to treat neuro-inflammation in rare diseases and Alzheimer’s disease, is offering 3.3 million units at $5.00 to $7.00 each to raise $20.0 million. The deal is expected to price sometime this week. Roth Capital Partners and Dawson James Securities are the joint book-runners.
  • Modular Medical (MODD proposed)This small company, which is developing a wearable insulin pump that it says will be simpler to use than the ones already on the market, is planning a NASDAQ uplisting of 4 million shares at $12.49 each to raise $30.0 million. This is NOT an IPO. This is a NASDAQ uplisting from the OTCQB market. The deal is expected to price this week. Oppenheimer & Co. is the sole book-runner.
  • Samsara Vision, Inc. (SMSA proposed) – This small ophthalmic device company is dedicated to improving the vision of people with Age-related Macular Degeneration (AMD), a leading cause of blindness among elderly people. Samsara Vision makes an implantable miniature telescope (IMT) – approved by the FDA in 2010 – and a surgical implant system. Samsara Vision’s IPO – scheduled to price Thursday evening, Jan. 27, to trade Friday – consists of 4.2 million shares at $5.00 to $7.00 each to raise $25.2 million. ThinkEquity is the sole book-runner.  

FGI Industries, Inc. (FGI proposed)This company is a leading global supplier of kitchen and bath products (kitchen cabinets, bathroom sinks, vanities and toilets, etc.) to The Home Depot, Lowe’s and other big box stores. Its IPO – scheduled to price Monday night, Jan.24, to trade Tuesday – is a small-cap unit offering of 2.5 million units (stock and warrants) at $6 to $8 each to raise $17.5 million. The Benchmark Company and Northland Capital Markets are the joint book-runners.

Two special-purpose acquisition companies (SPACs), also known as blank-check companies, are also expecting to price their IPOs in the week ahead:

Keyarch Acquisition (KYCHU proposed) – 10.0 million units at $10 each to raise $100 million – Pricing Monday night to trade Tuesday –EarlyBirdCapital and Haitong International are the joint book-runners. This New York-based SPAC intends to focus on disruptive tech businesses and innovative services companies based in the U.S., Israel and Southeast Asia (excluding China, Hong Kong and Macau). (Incorporated in the Cayman Islands)

Sunfire Acquisition (SUNFU proposed)10.0 million units at $10 each to raise $100 million – Pricing Tuesday night to trade Wednesday – EF Hutton is the sole book-runner. This Los Angeles-based SPAC will search for TMT (tech, media & telecom) companies in the Middle East and Asia (excluding China, Hong Kong and Macau). (Incorporated in the Cayman Islands)

First Week of February

Looking ahead to the following week, no IPOs have been scheduled so far. But that could change on Monday morning when the U.S. Securities and Exchange Commission opens its filing window again for business.

Stay tuned.

(For more information, please go to the IPO Calendar and click on a company’s name – the hyperlink will take you to the company’s IPO Profile, including a link to its prospectus.)

(Never trade on proposed symbols. You might wind up owning something on the OTC Bulletin Board.)

Disclosure: Nobody on the staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The staff does not issue advice, recommendations or opinions.

Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums), is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute change.