TGOD IPO What to Expect
Get on the hype train that is TGOD! My GOD it’s going to be huge! But before you buy, let’s take a look at what most likely will happen when the TGOD IPO occurs. There are two time frames to consider, the IPO date and 6 months down the road.
In order to know what is going to happen, we need to look at the previous rounds of financings done by early investors. Yes earlier than you, even though you are buying on the very first day of trading. (Or maybe you won’t buy day one)
This is the earliest financing on their website, raising 10 million, selling units at $0.50 per share. There is no mention of warrants in this round, so that’s a good thing. The price was probably cheap enough they didn’t need warrants to incentivize investors.
Here is the 2nd round of financing, they raised another
7 million. This round was bumped up due to high demand to 28 million. This time the increase in funding is pretty large, 4 times more than what they were aiming for.
This time the price per unit is more than double at $1.15. This time the financing does come with warrants. So even though the price has gone up, they have sweetened the deal with warrants.
This round also has a 6 month lock up period.
I’m not sure if the warrants will be free trading at the time of IPO.
Here is the 3rd round, which I participated in, with a $5,000 investment. (post about that how I did that) Again the price per unit has increased. This particular PP was open to investors that are not accredited. This round also came with warrants, but this time 1/2 warrant for each share purchased. Also notice the exercise price for the warrants is higher at $3.00 this round vs $2.15 for the previous round.
So that is the three rounds of financing, all three have lock up periods of 6 months. Each round of fundraising was increased in value, so it does show investor demand.
Below is the TGOD IPO round of financing. When I first started investing, I had no idea an IPO was a financing round. I thought it just meant the stock was going public. TGOD has raised another 100 million dollars in this round and it sounds like an over allotment was also used bumping it up to 115 million.
This round is at 3.65, so the company has basically set the IPO price in this range. Does it mean the stock will stay around this price when it goes live, time will tell. If the market believes the company is overpriced at this valuation, it could tank. (short sellers could also affect the price)
What does it all mean
6 month dip
The first three rounds of financing are locked in for 6 months after the IPO. So you can easily say these early investors will not affect the IPO as they cannot sell when the stock goes live. This is a good thing, it will mean the stock shouldn’t crash as soon as it goes live.
October would be when these shares go free trading. Lets just do a hypothetical, say the stock is at 7.00 in September. This would be a 1300% return for the investors that bought the .50 round of financing. Would it be tempting to cash in your 13x gains?
Unless these early investors are truly committed to holding long term, most likely there will be a sell off. This would just be a temporary sell off as these early investors get out. Eventually new investors would buy up the shares and the stock would start to climb once again.
Aurora Cannabis has invested in TGOD, they won’t be looking to flip their shares at the 6 month mark. This is a good thing, bringing some stability to the stock.
The IPO is only a few days away. I’ve requested $60,000 worth of shares, so I have a lot at stake. Part of the reason I’m mentally preparing for what will happen.
Due to the lock up of shares, there will be a limited amount of shares trading when the stock goes live. I think this could help make the stock run up more than expected, but really not sure.
The TGOD IPO round of financing has no limits on selling your shares. So this means if shortly after IPO the stock were to say rise even 20%, people who bought the IPO round could sell and make really good profit.
The higher TGOD goes near the IPO, the higher the chances of the pre-IPO sellers taking profit. I have no idea what level that will be.
I avoid buying near stock IPOs, as they are hard to predict what will happen. Also over time learning about financing rounds has helped me figure out why these stocks will drop when early investors get out.
If I was going to buy TGOD once the stock went live, it would be after a sell off occurred. This could be shortly after the IPO or at the 6 month mark. The one issue with waiting until the 6 month mark is that the Canadian market will be fully legal at that time, could we see these stock increasing in value around that time. If over the next 6 months the market goes up dramatically the 6 month dip might not be to a very low price point.