For decades the exclusive domain of science-fiction plots, the concept of autonomous vehicles (AVs) has nevertheless played important roles in popular culture. Starting from the lovable Volkswagen Beetle named Herbie featured in the 1968 film The Love Bug to the nostalgic millennial’s favorite KITT from Knight Rider, AVs are ingrained in the collective consciousness. It’s just that the technology to impart such innovation was never available — until now.
Thanks to an explosion of progress in semiconductor capacity and the advent of machine-learning protocols, society is on the cusp of an autonomous future. Indeed, heavyweight tech companies like Alphabet Inc. (NASDAQ: GOOG, NASDAQ: GOOGL) have aggressively directed resources to develop and eventually commercialize AV solutions. Many of these pioneering platforms focus on consumer-level mobility. However, AV specialist Cyngn distinguishes itself by aiming to shift the industrial vehicle paradigm.
By developing and delivering autonomous driving software for commercial enterprises, Cyngn facilitates higher productivity, lower costs and superior safety outcomes. If successful, its initial public offer (IPO) could positively disrupt multiple industrial sectors as world markets strive to recover from the COVID-19 pandemic.
- When is the Cyngn IPO Date?
- Cyngn Financial History
- Cyngn Potential
- How to Buy Cyngn IPO (CYN) Stock
- CYN Restrictions for Retail Investors
- CYN Pre-IPO
- Balancing Relevance Over Provenance
When is the Cyngn IPO Date?
Drawing significant buzz thanks to the underlying relevance, Cyngn is set to make its debut on the IPO calendar on Oct. 20, 2021. Shares will trade on the Nasdaq exchange under the ticker symbol CYN.
Earlier, on Sept. 3, Cyngn filed its IPO prospectus with the U.S. Securities and Exchange Commission (SEC). On Sept. 30, the AV specialist announced terms, signaling the intention to raise $30 million through the distribution of 3.5 million shares at a price range between $7.50 to $9.50 per unit. At the midpoint, Cyngn would have commanded a valuation of $476 million.
However, on Oct. 19, the company confirmed the pricing of its IPO at $7.50 per share, while the number of shares distributed will remain the same. Further, Aegis Capital Corp. provides the sole bookrunning management services for the offering. Per a recent press release, gross proceeds will likely total “$26.3 million before deducting underwriting discounts, commissions and offering expenses.”
Prospective buyers should note that Cyngn has granted Aegis a “45-day option to purchase up to 525,000 additional shares” of CYN stock at the initial offering price to cover any over-allotments, primarily to stabilize the deal under public trading.
Despite available tools to mitigate volatility, you should be aware that CYN stock will carry risks associated with IPOs tied to the broader AV industry. For instance, manufacturers of lidar (light detection and ranging) sensors — key components of AVs to help them “visualize” their environment — have not fared well despite substantial hype.
Velodyne Lidar (NASDAQ: VLDR), which boasts partnerships with tech giants including NVIDIA (NASDAQ: NVDA), once commanded an equity unit priced at over $27 late last year. At time of writing, VLDR is down at $6.30. The same situation impacts Velodyne rival Luminar Technologies (NASDAQ: LAZR), which previously closed near $42 before eventually slipping below $16 on the Oct. 19 session.
Therefore, while AV solutions are wildly pertinent to the next generation of applications tied to artificial intelligence, you should be prepared to exercise years of patience with CYN stock.
Cyngn Financial History
According to information provided by the Bureau of Labor Statistics, occupational transportation incidents took the lives of 2,080 people in 2018. This tragic tally represented 39% of the 5,221 annual number of fatalities that stemmed from occupational injuries during that year.
Naturally, the priority of any organization is safety. Unfortunately, whenever you combine the human element with heavy machinery, injuries and fatalities are inevitable. As dedicated as American industrial workers are to their jobs, the reality is that every living creature requires a modicum of sustenance and rest. Such requirements only amplify exponentially when involving movable equipment.
Not only that, safety incidents cost time and money. According to the National Safety Council, workplace injuries cost the U.S. economy $171 billion in 2019. On average, this number tallies to $1,100 per worker. Also, the red ink associated with workplace fatalities amounts to an average of $1.22 million per death. Finally, medical consultations per injury result in a $42,000 cost outlay.
Factors in the process necessary to vet and train specialized workers and employers face a mountainous wave of potential liabilities. When you consider that the total days lost to workplace injuries was 70 million, you quickly appreciate that industry safety issues represent a multidimensional problem.
Hence, the total addressable market (TAM) for Cyngn is massive. As the company indicated in its IPO prospectus, its TAM amounts from billions of dollars in industry-specific markets to trillions that self-driving vehicles can capture across all industries.
You might be wondering at this point why CYN stock attracts only a relatively small price tag for what the underlying business offers. After all, when Cyngn priced its IPO, the final rate slipped to the bottom of its earlier estimate. With so much potential embodied in this equity unit, is there a catch to this discount?
Rule number 1 in business: when something sounds too good to be true, it usually is. For CYN stock, the issuing firm is a pre-revenue entity, a euphemism for an organization that has yet to generate sales.
To be fair, many innovative firms are pre-revenue outfits. However, that also means you’re paying an incredibly high fundamental premium since CYN stock is not currently tied to an actual operation but rather the potential of such.
Irrespective of the company’s “abridged” financial statement, Cyngn’s narrative is exceptionally compelling. Due to the global impact of the COVID-19 pandemic, most industries suffered a lost year for most of 2020. Therefore, the focus of this year and the years to come is recovery. Unfortunately, the mad rush to capture demand has created a bottleneck.
In other words, there’s only so much that consumers and businesses can buy in 1 year to make up for wholesale losses in the prior. Therefore, enterprises cannot just focus on expanding the top line but must also consider efficiencies (and perhaps cost cuts) to bolster the bottom line. That’s exactly where Cyngn — if it succeeds in its long-term strategies — can make its mark.
With its AV software services that can scale to meet any need, from retrofitting existing fleet vehicles to embedding new ones off the assembly line, Cyngn can potentially impart 3 major improvements.
- Higher productivity: Even the best workers need downtime to stay on top of their game. In addition, outside factors such as the desire to earn more money can see a company’s best resources jump to the competition. With an AV fleet, they stay loyal, perform around the clock and never unionize.
- Lower costs: With an automated fleet, enterprise clients only pay an upfront cost along with maintenance expenses as they come up. Otherwise, upper management can cut its dependency on human labor, which imposes heavily on the bottom line and adds to potential workplace incidents.
- Superior safety outcomes: As described earlier, safety-related costs can rack up serious liabilities. By mitigating or outright eliminating human error, companies can provide a much safer environment for their remaining workforce.
While the sky’s the limit for CYN stock if Cyngn succeeds in its business initiatives, that’s also a big “if.” All pre-revenue companies carry risk due to the added unknown variable.
How to Buy Cyngn IPO (CYN) Stock
Engaging an IPO at the open is a straightforward process if you already know how to buy stocks. If not, just follow the steps below.
Step 1: Pick a brokerage.
All reputable brokerages will allow you to acquire CYN stock. However, if you want to develop your investing acumen, narrow your list of best brokers to those that provide the most access to myriad opportunities.
Step 2: Decide how many shares you want.
Betting on IPOs is risky. Therefore, choose a balanced share count to mitigate the very real threat of downside movements.
Step 3: Choose your order type.
Before placing your trade, learn these market concepts.
- Bid: The buyer’s best offer for a stock.
- Ask: The seller’s lowest acceptable price.
- Spread: The difference between the bid-ask price, the spread indicates market risk as this is also the profit margin for market makers.
- Limit order: Buy or sell requests at a predetermined price, limit orders provide transparency but no execution guarantees.
- Market order: Market orders guarantee fulfillment but only at the current rate.
- Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower.
- Stop-limit order: Stop-limit orders only leave positions at a specified price, but they also carry non-fulfillment risks.
Step 4: Execute your trade.
Follow these steps to execute a market order:
- Select your action type (buy or sell).
- Enter the shares you want to acquire (or sell).
- Hit the Buy (or Sell) button.
Follow the same sequence for limit orders (but include your execution price).
CYN Restrictions for Retail Investors
Before partaking in an IPO, review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons. People with privileged information cannot participate.
For future public market debuts, you should consider opening an account with ClickIPO, which provides access to pre-IPO (initial offering price) shares for select enterprises.
Balancing Relevance Over Provenance
When it comes to appealing storylines, CYN stock is largely unrivaled. Automation is a major tech talking point, and, eventually, someone will come up with a viable solution. Whether that’s Cyngn for the commercial sector remains to be seen, but speculators have the option of wagering on it now.