Erayak Power Solution Group Inc. (RAYA), the Cayman Islands holding company of a Chinese business that makes inverters and generators for vehicles and appliances, priced its IPO on Tuesday night (Dec. 13, 2022) at $4.00 – as expected – on the full 3.0 million shares in the prospectus to raise $12.0 million. The stock slipped in its NASDAQ debut today, opening at 11:06 a.m. EST today at $3.70 – down 30 cents or down 7.5 percent – from its $4.00 IPO price. The stock skidded further to trade at $3.42 at about 12:15 p.m. EST today – down 58 cents or 14.5 percent from its IPO price on volume of about 1.85 million shares. Erayak Power’s stock closed at $3.37, down 63 cents or 15.75 percent from its IPO price on volume of 2.28 million shares.
The U.S. stock market staged a strong rally before the Fed’s announcement of its 50-basis-point rate increase, which was expected, and then gave up those gains to end lower. The Dow Jones Industrial Average fell 142.2 points or 0.42 percent to end at 33,966.35, while the NASDAQ Composite Index slid 85.93 points or 0.76 percent to close at 11,170.89. The S&P 500 fell 24.33 points, or 0.6%, to settle at 3,995.32 after trading higher during the early part of the day.
Although Wall Street had expected the 50-basis-point increase in the fed funds rate, stock investors were disappointed by the Fed’s hint that it may have to keep raising interest rates to curb inflation.
Less than two hours before the Federal Reserve’s rate decision – the last one of 2022 – U.S. stocks were on the upswing at midday: The NASDAQ Composite Index was up 47.32 points or 0.42 percent at 11,304.13, while the Dow Jones Industrial Average was up 194.9 points or 0.57 percent at 34,303.59. The S&P 500 was up 19.03 points or 0.47 percent at 4,038.68.
Erayak Power’s IPO was the first deal to get priced this week – ahead of the Fed’s rate announcement on Wednesday afternoon – following Tuesday’s cooler-than-expected U.S. CPI data for November.
Craft Capital Management and R.F. Lafferty & Co. were the joint book-runners of Erayak Power’s IPO.
Five more small-cap IPOs are on this week’s calendar – all NASDAQ listings – and all scheduled for pricing Thursday night (Dec. 15, 2022) to trade Friday, Dec. 16th.
Stay tuned.
**(Editor’s Note: This is a developing update of this week’s edition of The IPO Buzz column.)
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