The IPO Buzz: Phoenix Motor Crashes in its NASDAQ Debut

Electric school bus and van maker Phoenix Motor Inc. (PEV) hit a wall today (Wednesday, June 8, 2022) in its NASDAQ debut. Phoenix Motor’s stock fell $1 from its $7.50 IPO price to open at $6.50 at 10:22 a.m. EDT on volume of 281,727 shares, NASDAQ records showed. That opening trade marked Phoenix Motor’s IPO as a broken deal. Phoenix Motor’s stock ended its first day of trading at $4.06, down 45.87 percent from its IPO price, on volume of 1,867,169 shares. (Editor’s Note: This column, published Wednesday, June 8, 2022, was updated Thursday morning with news on a SPAC IPO pricing set for Thursday night, and updated again on Friday morning.)

The Phoenix Motor IPO was priced Tuesday night (June 7, 2022) in a slimmed-down version of itself – 2.1 million shares, down from 2.4 million in the prospectus. The $7.50 IPO price was below the $8 mid-point of the deal’s $7-to-$9 range. Phoenix Motor’s IPO raised $15.75 million – $4.25 million less than it had initially planned – after selling fewer shares and pricing them below the mid-point of the range.

Phoenix Motor’s IPO is one of just three deals to start trading in June, which marks the slowest start to summer in about 22 years.

A Bumpy Ride

For Phoenix Motor, the road to going public was a bumpy one. The deal’s size was trimmed in late May to 2.5 million shares from 4.0 million shares initially. A month earlier, the company changed underwriters and removed warrants from its IPO.

Prime Number Capital was the sole book-runner on the deal. Revere Securities, Westpark Capital and Shengang Securities were the co-managers.

Phoenix Motor Inc., based in Anaheim, California, designs, makes and sells light- and medium-duty EVs, including electric school buses, trucks and vans. The company, founded in 2003, also designs, assembles and integrates electric drive systems. It also markets and sells electric vehicle chargers for the commercial and residential markets.

SPI Energy Co., Ltd. spun off Phoenix Motor in this IPO. It bought the company in 2020. But SPI Energy still controls Phoenix Motor through the EV company’s parent, EdisonFuture, Inc., which is an SPI Energy subsidiary. After the IPO, EdisonFuture still owns about 87.5 percent of the outstanding voting power of Phoenix Motor’s common stock.

Despite its 18 years in business, Phoenix Motor is not profitable. The company reported a net loss of about $560,000 on revenue of $3 million for the last 12 months, according to the prospectus.

1 SPAC Priced

Bucking the tide of tough times for SPACs, one SPAC IPO was set for pricing Thursday night, June 9, to trade Friday, June 10, on the NASDAQ: Acri Capital Acquisition Corp. (ACACU proposed). This is an IPO of 7.5 million units at $10 each to raise $75 million. EF Hutton is the sole book-runner.

Acri Capital Acquisition’s SPAC IPO was priced Thursday night, raising $75 million in line with the terms in its prospectus, and becoming the 68th SPAC IPO priced so far in 2022. This blank check company, among the few with a female CEO, will focus on tech-enabled companies in North America. CEO “Joy” Yi Hua is also the chairwoman of Acri Capital Acquisition’s board of directors and the CFO.

NASDAQ records showed that Acri Capital Acquisition’s stock opened Friday at $9.98, down 2 cents from its IPO price, and later traded at $9.99. This performance marked it as technically a broken deal on its first day of trading, although this is not an unusual scenario for SPAC IPOs. Acri Capital Acquisition’s stock started trading at a time when the overall U.S. stock market slid sharply after economic data revealing that the U.S. Consumer Price Index (CPI) unexpectedly hit a fresh 40-year high in May.

Another EF Hutton deal – Embrace Change Acquisition Corp. (EMCGU proposed) – had initially been scheduled for pricing on Thursday night. But the timing of that SPAC’s IPO is still to be determined. Embrace Change Acquisition’s IPO also consists of 7.5 million units at $10 each to raise $75 million. This deal was recently revised to include rights.

June Moonshot

Zhong Yang Financial Group (TOP) scored a moonshot when it started trading last week – on Wednesday, June 1st. The Hong Kong-based online brokerage company’s IPO was a small-cap deal of just 5 million shares priced at $5.00 each to raise $25 million. Zhong Yang Financial’s stock ended its first day of trading (June 1, 2022) at $16.99 – up a whopping 239.8 percent from its IPO price of $5.00. (A moonshot occurs when a stock jumps at least 100 percent – doubling its IPO price or more – in its first day of trading.)

Fast forward a week: The stock was trading at midday on Wednesday, June 8, 2022, at $17.48 – up 249.6 percent from its IPO price.

Univest Securities and Valuable Capital were the joint book-runners on Zhong Yang Financial Group’s IPO.

June Belly Flop 

SaverOne 2014, Ltd. (SVRE/SVREW) completed its public offering of stock and warrants in connection with its NASDAQ uplisting last Friday (June 3, 2022). But the Israeli tech company’s stock did not fare well in its first day of trading on the NASDAQ. The stock opened and closed on Friday (June 3rd) below its offering price – the mark of a broken deal.

ThinkEquity was the sole book-runner on the SaverOne 2014, Ltd. offering.

Next Week

The IPO Calendar for the week of June 13, 2022, is sparse. But that could change as deals continue to trickle into the SEC’s filing window.

Stay tuned.

(For more information: Please see our IPO Calendar)

(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.