The IPO Buzz: June Traffic Stalls for the Bear

June IPO traffic is stalling for time as the S&P 500 began the week by falling into bear market territory. No traditional IPOs are on tap for pricing during the week of June 13, 2022. Just two tiny deals, including a unit offering, are on the IPO Calendar. And those deals may get pushed back, the IPO pros say. (Editor’s Note: This column, published Monday afternoon, June 13, 2022, was updated after the close to show that the S&P 500 ended the day down almost 4 percent to enter a bear market for the first time since 2020.)

“In this market? I don’t see how they (bankers) can get anything done,” a veteran IPO trader says.

U.S. stock futures looked ugly this morning. And it was not a false alarm. By early Monday afternoon, the S&P 500 Index was down 125.91 points, or 3.23 percent, at 3,774.95, while the Dow Jones Industrial Average was down 742.70 points, or 2.37 percent, at 30,650.09, and the NASDAQ Composite Index was down 443.95 points, or 3.91 percent, at 10,896.08.

By the close, the S&P 500 fell 151.23 points, or 3.9%, to 3,749.63 – sliding into a bear market for the first time since 2020, The Wall Street Journal reported. Monday’s sell-off took the S&P 500 down 22 percent from its Jan. 3, 2022, high. The Dow Jones Industrial Average dropped 876.05 points, or 2.8%, to 30,516.74. The tech-heavy Nasdaq Composite declined 530.80 points, or 4.7%, to 10809.23, off 33% from its November record.

Inflation fears are driving the stock market’s sell-off for the second day after U.S. data on Friday (June 10) showed the Consumer Price Index at a fresh 41-year high. Investors are piling into U.S. bonds, pushing the yield of the benchmark 10-year U.S. Treasury note up to 3.325 percent, on track for its highest close since 2011, as The Wall Street Journal notes.

Fed funds futures are showing an expectation that the Federal Reserve will raise interest rates by 75 basis points this week at its two-day meeting (June 14-15), which will end on Wednesday afternoon. The Fed’s interest-rate announcement is expected at around 2 p.m. EDT on Wednesday (June 15).


Light IPO Traffic Ahead

IPO bankers have two exceptionally small deals in the wings for pricing this week.

Heart Test Laboratories, Inc. (HSCS proposed for the stock/HSCSW proposed for the warrant) is so small that it qualifies as a nano-cap deal – 1.75 million units (stock and warrants) at $4.50 to 5.50 each to raise just $8.75 million.

The medical device maker’s IPO is expected to price Tuesday night (June 14) for a NASDAQ debut on Wednesday, June 15. The Benchmark Company is the sole book-runner.

Heart Test Laboratories, Inc., doing business as “HeartSciences,” is a medical technology company focused on applying innovative AI-based technology to an ECG (also known as an EKG) to expand and improve an ECG’s clinical usefulness. Its objective is to make an ECG a far more valuable cardiac screening tool, particularly in frontline or point-of-care clinical settings. The company, founded in 2007, is based in Southlake, Texas.

HeartSciences’ first product candidate for FDA clearance, the MyoVista wavECG, or the MyoVista, is a resting 12-lead ECG that is also designed to provide diagnostic information related to cardiac dysfunction, which has traditionally only been available through the use of cardiac imaging. The MyoVista also provides conventional ECG information in the same test.

Heart Test Laboratories, Inc. is not profitable.

Tentatively set for “week of June 13” pricing is the small-cap IPO of Intelligent Living Application Group (ILAG proposed) – 5.1 million shares at $5.00 each to raise $25.3 million. Network 1 Financial Securities is the sole book-runner.

Headquartered in Hong Kong, Intelligent Living Application Group manufactures and sells high quality mechanical locksets to customers in the United States and Canada. The company is developing new products, including smart locks.

Intelligent Living Application Group is not profitable.

Week of June 20, 2022

Mobilicom Limited (MOB proposed) is the only IPO confirmed so far for the week of June 20, 2022. This is a small-cap IPO from an Israeli company that provides cybersecurity solutions, hardware and software for small drones. ThinkEquity is the sole book-runner.

If the U.S. stock market stabilizes this week, some other companies may land on next week’s IPO Calendar. There’s some expectation that Yoshiharu Global Co. (YOSH proposed), a Southern California-based chain of Japanese ramen noodle restaurants, may be among the names that could appear on the pricing roster next week. EF Hutton and Valuable Capital are the joint book-runners on the Yoshiharu IPO.

In the meantime, IPO and SPAC filings continue to flow into the SEC at a moderate pace.

Stay tuned.

(For more information about these companies, please see our IPO Calendar and click on a company’s name; the hyperlink will take you to the company’s IPO Profile, which includes a link to the 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.