The IPO Buzz: Nano Labs Ltd. Cuts its IPO by 45 Percent

Nano Labs Ltd. (NA proposed), the crypto-focused Chinese maker of fabless chips, slashed its IPO by 45 percent late Tuesday afternoon (July 5, 2022). Under the new terms, Nano Labs Ltd. will offer 1.77 million American Depositary Shares (ADS) at a price range of $11.35 to $11.51, according to an F-1/A filing dated July 5, 2022. (Editor’s Note: This column was updated Thursday with the news that Nano Labs Ltd. now expects to price its IPO on Monday night, July 11, 2022.)

The IPO’s estimated proceeds are now $20.23 million, a drop of 45 percent from the $36.75 million that the deal was expected to produce under its initial terms of 3.5 million ADS at $9.50 to $11.50.

This deal could be facing some headwinds due to the turmoil in the crypto market, veteran IPO pros say.

Vauld, a crypto services firm backed by Peter Thiel, said that it had suspended withdrawals, trading and deposits on its platform, according to a report in The Wall Street Journal over the Fourth of July holiday weekend. Nexo, one of the largest crypto lenders, agreed in principle to buy Vauld, The WSJ reported on Tuesday (July 5, 2022).

Bitcoin is trading slightly below $20,000, down 71 percent from its peak at $67,802 last November, according to The Wall Street Journal.

Nano Labs Ltd. is now expected to price its IPO on Monday night, July 11, to start trading on Tuesday, July 12, on the NASDAQ. (Earlier this week, the expectation was that this deal might be priced Thursday night, July 7, to trade Friday, July 8, 2022.)

AMTD Global Markets, Maxim Group and Tiger Brokers are the joint book-runners.

In the prospectus, Nano Labs Ltd. says its new products include chip solutions used for Ethereum mining and Bitcoin mining, as well as for distributed computing and data storage solutions mostly for Filecoin mining.

“We expect our results of operations to be affected by the prices of cryptocurrencies, in particular, significantly and negatively impacted by the sharp price decrease of the prices of cryptocurrencies, including Bitcoin, Ethereum, Ethereum Classic, Grin and Filecoin,” Nano Labs Ltd. says in its prospectus.

Nano Labs Ltd. is not profitable. The prospectus shows that Nano Labs had a net loss of $27.44 million on revenue of $6.19 million for the last 12 months.

Other small-cap deals on the IPO Calendar – listed initially as expected to price during this holiday-shortened week – have been pushed back to next week.

The U.S. stock market was closed Monday for the Fourth of July holiday. The long holiday weekend was a welcome break for Wall Street denizens who have endured a rocky first half of the year – the worst for the S&P 500 since 1970.

On Tuesday, the major U.S. stock indexes turned in a mixed performance: The S&P 500 edged up 6.06 points, or 0.2 percent, to 3,831.39, while the Dow Jones Industrial Average slid 129.44 points, or 0.4 percent, to 30,967.82. The tech-driven NASDAQ Composite Index reversed its earlier losses to climb 194.39 points, or 1.7 percent, to 11,322.24.

Meanwhile, the IPO filings continue to trickle into the SEC.

Stay tuned.

(For more information, please see: IPO Calendar – Click on the company’s name and the hyperlink will take you to the 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.