The IPO Buzz: Postponed – Rhodium (RHDM) & Four Springs (FSPR)

Postponed is the word of the day. Bitcoin miner Rhodium Enterprises, Inc. (RHDM proposed) and a REIT, Four Springs Capital Trust (FSPR proposed), have pulled their IPOs – both expected to start trading today (Thursday, Jan. 20, 2022) – “due to market conditions.” The NASDAQ’s slide into correction territory on Wednesday was the reason.

“They just didn’t want to face those headwinds,” a seasoned IPO pro says.

The recent volatility of Bitcoin prices also played a role in Rhodium’s decision to pull its deal, Wall Street sources say. Coinbase reported on Wednesday (Jan. 19, 2022) that Bitcoin’s price was down 4.1 percent in the past week, falling to $42,164.98, about 38.7 percent below the record high of $68,789.63.

Rhodium had planned to offer 7.7 million shares at $12 to $14 in its IPO. B. Riley, Cowen and Needham & Co. were the joint book-runners.

Based in Fort Worth, Texas, Rhodium uses proprietary liquid-cooled technology to reduce the energy costs of running its Bitcoin mining computers. The company owns two Bitcoin mining sites in Texas.

Rhodium Enterprises is profitable. The company reported net income of $12.35 million on revenue of $87.25 million for the last 12 months ended Sept. 30, 2021.

Rising interest rates ahead also put the chill on Four Springs Capital Trust’s IPO. The REIT’s IPO had been set at 18 million shares at a $13-to-$15 price range.

U.S. stock investors expect about four interest-rate increases this year, with the first one likely to come in March, according to some financial news reports.

Morgan Stanley, Goldman Sachs, Wells Fargo Securities, Mizuho Securities, ScotiaBank, Wolfe/Nomura Alliance and Berenberg were the joint book-runners for the Four Springs Capital Trust IPO.

Four Springs Capital Trust, a REIT established in 2012, owns outright or owns interests in 156 properties in 32 states that are nearly 100 percent leased. The Lake Como, N.J.-based company’s income-producing portfolio includes industrial, medical, service/necessity retail and office properties.

The Four Springs REIT was not profitable. The company reported a net loss of $12.9 million on revenue of $100.35 million for the last 12 months.

Seven SPACs

Bankers priced seven SPACs this week, raising $1,185.0 million, or about $1.19 billion.

On Tuesday night, one SPAC deal was priced.

On Wednesday night, three SPAC IPOs were priced – Banyan Acquisition Corp. (BYN.U), DUET Acquisition Corp. (DUETU) and Generation Asia I Acquisition Limited (GAQ.U).

On Thursday night (Jan. 20, 2022), three more SPAC IPOs were priced, bringing the SPAC total for 2022 so far to 21 SPACs priced in the past three weeks. (For details on SPACs that started trading on Friday (Jan. 21, 2022) – Please see: IPO Calendar

Just one sizable IPO is on tap for pricing next week.

Stay tuned.

(Editor’s Note: This column was updated after the close on Friday, Jan. 21, 2022, with total SPAC pricing volume for the week.)

(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.