Helbiz IPO (HLBZ) Stock

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Contributor, Benzinga
August 19, 2021
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Back in the early months of 2020, Americans woke up to an eerie vision. From the streets of Los Angeles to the glittering lights of New York, the noise that once characterized these iconic metropolises no longer emitted a sound. In its place sat an emptiness that, while offering respite for stressed-out urban dwellers, felt completely out of place.

But with the gradual return to normal, so too did the consequences of environmental damage. Fortunately, micromobility platform Helbiz offers a new approach to personal transportation, attracting interest for its recent initial public offering (IPO).

When is the Helbiz IPO Date?

Unlike your standard public market debut, Helbiz chose to combine with GreenVision Acquisition Corp. (NASDAQ: GRNV), a special purpose acquisition company (SPAC). Also known as a blank-check firm, SPACs have no underlying businesses of their own. Instead, their sponsors take them public with the intent of seeking out a merger target. Once identified and approved, the two companies merge, with the combined entity assuming the identity of the target enterprise.

On Aug. 11, 2021, GreenVision’s shareholders approved the merger with Helbiz. Two days later, Helbiz inked its debut on the IPO calendar as its own unique brand. The micro-mobility service provider’s shares trade on the Nasdaq exchange under the ticker symbol HLBZ.

Following the business combination, Helbiz raised $24.5 million in gross proceeds before deducting for investment banking fees and other costs associated with the SPAC deal. According to a corporate statement, the funds will allow Helbiz to grow its micromobility network into other cities across the U.S. and Europe. Further, management intends to initiate a presence in smaller cities, particularly those with less robust public transportation options.

Given its potential, HLBZ stock opened its Aug. 13 session with much fanfare. At one point, shares hit $25.30 on an intraday basis before closing at $12.95, a significant bump up from GreenVision stock’s $10 initial offering price prior to the merger announcement. Still, subsequent sessions have been less encouraging, possibly in part because of controversies associated with Helbiz’s cryptocurrency-related endeavors.

Back in 2018, the company launched an initial coin offering (ICO), a fund-raising initiative based on the sale and distribution of virtual currencies. A murky legal arena in the best of times, aggrieved investors sued Helbiz, alleging that its ICO was a pump-and-dump scam.

Further, legal filings in the matter suggest that the Helbiz cryptocurrency was a security not listed in a U.S. exchange or purchased in the U.S. Due to the ambiguity of the issue and potential financial repercussions, HLBZ stock faces challenges not common to other IPOs.

Helbiz Financial History

Though a relatively small company — Helbiz currently sports a market capitalization of $226 million — investors are nevertheless intrigued with the company’s possible upside narrative. According to research from Valuates Reports, the micromobility sector commanded a valuation of $40.19 billion in 2020. But by 2030, experts predict the industry could generate sales of $195.42 billion. If so, that would represent a compound annual growth rate of 17.4% between 2021 to 2030.

While micromobility solutions attract all demographics for their convenience and environmentally friendly profile, Valuates projects that the age segment of 35 to 54 years will be the most lucrative. Additional research from the Pew Research Center backs up this thesis, because millennials represent the largest workforce in the U.S. and will therefore offer tremendous influence in the years ahead. Further, members of Generation X can help provide a higher-income basis.

By logical deduction, Helbiz benefits from organic tailwinds that should theoretically bolster its finances. However, investors should be prepared for turbulence as the company oversees a pre-revenue business. Its loss from operations in 2020 came in at $849,432, which was significantly more red ink than the loss of nearly $108,000 in 2019.

Still, Helbiz’s balance sheet shows some positives, particularly the fact that it does “not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities,” according to its filings with the Securities and Exchange Commission. Thus, if management succeeds in expanding its offerings to other metropolitan areas, Helbiz could presumably take greater market share of the burgeoning micromobility industry.

Helbiz Potential

An intriguing market debut no matter how you cut it, Helbiz represents a balance between exposure to a relevant industry and company-specific challenges that may negatively affect its future valuation.

On the positive front, the ongoing recovery from the COVID-19 pandemic bodes favorably for the micromobility sector. First, traffic has boomed — and that’s no anecdotal observation. According to the U.S. Bureau of Transportation Statistics, vehicle miles traveled soared by nearly 62% between April 2020 and May 2021.

To be fair, present traffic statistics match levels last seen around November 2015. Still, such a quick ramp up in congestion — especially in hot metropolitan areas — will likely spark demand for micromobility services. Fortuitously, Helbiz will be expanding its business at just the right time.

Also, the exodus from cities into rural areas due to the pandemic may fade and perhaps even reverse. Interestingly, a Reuters report this year stated, “Fears that U.S. cities would be emptied by the coronavirus pandemic are giving way to potential signs of revival, according to a series of analyses that suggest any dislocation from the last year will prove temporary.” If so, that’s a big positive for HLBZ stock.

On the other hand, micromobility solutions feature a low barrier to entry. As npr.org declared, “Electric motors are much simpler than internal combustion engines, with fewer moving parts.” Therefore, Helbiz must distinguish its services in an industry that could become commoditized.

Finally, it’s always difficult to evaluate a pre-revenue organization. The situation becomes more challenging when you throw in potential legal troubles brewing from a cryptocurrency initiative. Therefore, if you decide to invest in HLBZ stock, you may want to do so with money you can comfortably afford to lose.

How to Buy Helbiz IPO (HLBZ) Stock

One of the reasons why SPAC-based IPOs have been so popular over the trailing year is democratization of early bird opportunities. By purchasing shares of SPACs before their merger announcement, retail buyers are essentially on equal footing with institutional investors who participate in bread-and-butter IPOs.

That said, choosing to wait for post-merger SPACs may also represent a wise strategy. Mainly, you just don’t know how the market will respond to a proposed business combination. Plus, by waiting, you’ll know what you’re getting involved in before you fork over your money.

As well, the process of acquiring SPACs is identical to any other equity unit. If you know how to buy stocks, you can jump right in. Otherwise, just follow the simple steps below.

Step 1: Pick a brokerage.

Thanks to the incentive-driven power of capitalistic competition, online brokers today feature standardized cost profiles, such as commission-free trading. Therefore, you should direct your search for best brokers based on functionality and access, such as the ability to purchase select pre-IPO shares.

Step 2: Decide how many shares you want.

IPOs are typically volatile and debuts based on SPAC combinations are unpredictable. To mitigate the risk, choose a share count that gives you decent reward potential but limits your downside exposure.

Step 3: Choose your order type.

Before taking your shot, familiarize yourself with these market concepts.

  • Bid: The maximum price a buyer will extend, the bid is always lower than the ask.
  • Ask: The minimum price a seller will take, the ask is always higher than the bid.
  • Spread: Primarily the difference between the bid and ask price, the spread also signals market liquidity and risk. Tighter spreads suggest higher liquidity and lower risk, while the opposite principle applies for wider spreads.
  • Limit order: To buy (or sell) stocks at a specific price, choose limit orders, which offer price transparency but no execution guarantees.
  • Market order: Conversely, you can guarantee fulfillment via market orders but only at the prevailing rate, which may fluctuate wildly during a session.
  • Stop-loss order: A protective structure for your portfolio, a stop-loss order automatically exits your position at either a predetermined price or anything lower.
  • Stop-limit order: Stop-limit orders only execute at a predetermined price, ensuring total transparency in your automated exiting protocol. However, such orders carry the same non-fulfillment risk as limit orders.

Step 4: Execute your trade.

To execute a market order, follow these steps:

  1. Select your action type (buy or sell).
  2. Enter the shares you want to acquire (or sell).
  3. Hit the Buy (or Sell) button.

Follow the same sequence for limit orders (but include your execution price).

HLBZ Restrictions for Retail Investors

Before participating in an IPO, consult the Financial Industry Regulatory Authority (FINRA) rules on restricted persons. Securities laws impose harsh penalties for those illicitly advantaging privileged information.

HLBZ Pre-IPO

For traditional IPOs, companies like ClickIPO offer interested retail buyers the ability to acquire shares of select entities at their initial offering price. Beware that being early in an IPO isn’t always the best move.

Micromobility but at a Potential Cost

With gridlock a permanent fixture of the world’s biggest metropolitan areas, replacing automobiles with electric vehicles only solves the environmental component of the problem. Just in New York City alone, congestion costs the economy $13 billion annually.

Micromobility networks help cut through the clutter, improving economic outcomes while eliminating emissions. Naturally, this dynamic bodes well for Helbiz. Simultaneously, however, competitive threats and legal concerns make HLBZ stock a tricky proposition.

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About Joshua Enomoto

His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.