Are you looking to buy an IPO? With Sofi Active Invest you can participate in upcoming IPOs before they trade on an exchange.
If you passed up the opportunity to swap your gas-guzzling SUV for a hybrid hatchback or other sensible vehicle, you might be regretting your decision — especially if you’ve been to the pump recently. Across the nation, gasoline prices have soared as the per-barrel rate of crude oil reached a 7-year high. Sadly, for everyday drivers, this dynamic has left only 8 states with gas prices below $3 per gallon.
Currently, the national average price at the pump is $3.25, presenting an uncomfortable backdrop for the delicate U.S. economic recovery. That’s because drivers aren’t the only folks feeling the pain.
According to the Des Moines Register, as temperatures begin dropping in certain parts of the country, MidAmerican Energy warned its residential customers that “their winter heating bills could jump 46% to 96% over last year's due to rising costs.”
In places like Iowa, the winter heating season typically runs from November through March, meaning impacted customers should brace themselves for a potentially stiff financial blow. Given the weaker-than-expected jobs report in September, the broader narrative is troubling — unless perhaps you’re invested in the oil and gas industry.
With all these dynamics in play, the upcoming rebranding of Penn Virginia Corp (NASDAQ: PVAC) to Ranger Oil Corp should be on speculators’ radar.
When is the Ranger Oil Corp IPO Date?
As a rebranding, oil and natural gas firm Ranger Oil Corp is not what you would technically call an initial public offering (IPO). Nevertheless, the company features a date of Oct. 18, 2021 on the IPO calendar, with shares scheduled to trade on the Nasdaq exchange under the ticker symbol ROCC.
For a process to be a true IPO, it must involve the first distribution of shares of a private enterprise seeking access to the capital market. To clarify, an IPO doesn’t have to be the first time a company went public ever. For instance, Krispy Kreme (NASDAQ: DNUT) first went public in 2000 before its parent company took it private. Then, earlier this year, the famous doughnut and coffeehouse chain went public again through a second IPO.
But with ROCC stock, the transaction involves a corporate name change rather than a fundamental shift in equity distribution. This strategic pivot is akin to an uplisting from the over-the-counter market to an established exchange, representing in some manner a spiritual IPO.
To illustrate the point, private companies blessed with a strong growth trajectory will often choose to go public as this route is a much more effective and efficient means to raise capital for various business-enhancing initiatives. Otherwise, such firms must depend on private equity funding rounds, which structurally limits participation from the general public.
In a rebranding for a publicly traded company, while the initial distribution of equity-based securities has obviously passed, successful execution can generate greater interest among retail investors, thereby leading to higher capital raises.
According to a compelling research study by Dr. Yanhui Zhao of the University of Nebraska Omaha, his team’s data suggests that “on average, rebranding events are associated with positive stock returns. We observed an average increase of 2.46% in stock prices, which is equivalent to an average gain of $31 million in market value of the sample firms.”
What draws the eyes to ROCC stock specifically is that the underlying oil and gas industry has gone bonkers due to searing demand. Combined with the unprecedented global supply chain disruption, the soon-to-be Ranger Oil could make its rebrand stick rather lucratively.
Ranger Oil Corp Financial History
In July 2021, Penn Virginia announced its agreement to acquire Lonestar Resources in an all-stock transaction. Approved unanimously by the boards of directors for both entities, Penn closed the acquisition on Oct. 6.
Among the highlights of the deal, the move complements “existing assets, increases estimated 2021 sales volumes and free cash flow (FCF) by ~50%, and increases inventory locations by 50% to 750 gross locations pro forma for the transaction,” per Penn’s press release.
Additionally, management expects “annual synergies of over $20 million” with the overall transaction anticipated to be “accretive to free cash flow and certain other key per share metrics to deliver long-term value to shareholders.”
Against outside fundamentals, the acquisition and subsequent rebranding couldn’t have come at a better time. In 2020, Penn Virginia rang up revenue of $273.3 million, a staggering loss of 42% against 2019’s sales result of $471.2 million. Of course, with a catastrophic plummeting of vehicle miles traveled during the worst of the COVID-19 pandemic last year, Penn’s fallout was not exceptional relative to other oil and gas companies.
In this year, however, the narrative has begun to change. For instance, while the aforementioned mileage statistic is still low against pre-pandemic norms (July 2021’s read is 1.2% below the same month 2 years ago), it’s much improved from the worst variance (April 2020 suffered a 41% decline year-over-year).
Better yet, Penn’s revenue trek this year reflects growing optimism toward societal and economic recovery. On a trailing-12-month (TTM) basis, Penn has posted top-line sales of $348.5 million. But at the current run rate of 2021, it’s well within reason for the company to exceed revenue of $420 million by the time it flips the page on the fiscal calendar.
Also worth noting is that in 2020, Penn suffered a net loss of $310.4 million due to the pandemic. But in the second quarter of this year, it posted a net income of slightly over $3 million, implying a return to profitability — especially amid the energy demand surge.
Ranger Oil Corp Potential
As you might expect from an acquisition between two similar companies, the combined business will allow Ranger Oil Corp to benefit from “ongoing operational efficiencies in both drilling and completion techniques.” In particular, “the ability to extend lateral length across the combined acreage position, targeting of high working interest acreage and increased wells per pad” will drive “more efficient capital deployment,” per the company’s press release.
In addition, the rebranding should help capture greater retail investor awareness for ROCC stock. On the surface, the corporate name Penn Virginia is ambiguous and frankly, easily forgettable. Under Ranger Oil Corp, prospective buyers of public equity will have no problem identifying the core business. Though a small matter, the rebrand allows management to capture more capital-accretive opportunities.
Most significantly, nobody knows for certain when the global supply chain disruption that has contributed massively to price upswings will end. However, The Wall Street Journal does not paint a pretty picture. “Even if fewer consumers travel and consume fuel, many analysts project that tumbling investment in new supply by energy companies will prop up oil prices.”
Moreover, “some are betting that a world-wide shortage of natural gas and other fuels needed to power homes and businesses will spill into the oil market.” And if that didn’t convince you to at least consider ROCC stock, the impact of climate change could catalyze even stronger demand for energy-related commodities.
To be sure, investors need to recognize that energy is a volatile market. As well, if the market anticipates improving supply-demand dynamics, ROCC stock could take a hit. Nevertheless, at the moment, analysts fear the darker side of the outlook spectrum.
How to Buy Ranger Oil Corp IPO (ROCC) Stock
As a rebrand, you can purchase shares of what will become ROCC stock right away if you already know how to buy stocks. If not, follow the steps below.
Step 1: Pick a brokerage.
If you’re not already working with a specific platform, you should narrow your list of best brokers to ones that provide enhanced opportunities, such as access to select pre-IPO shares (or new issues at their initial offering price).
Step 2: Decide how many shares you want.
Due to the volatility risks associated with energy markets, it’s important to navigate this sector with a balanced share count to mitigate downside.
Step 3: Choose your order type.
Before trading, understand 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 specific 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 exit 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).
ROCC Restrictions for Retail Investors
Before buying any IPO, consult the Financial Industry Regulatory Authority (FINRA) guidelines on restricted persons to avoid legal issues.
Since ROCC stock is not a true IPO, there’s no pre-IPO access. That said, interested buyers of new shares should open an account with ClickIPO, which provides early bird access to select opportunities.
Rebranded for Upside Potential
While not a true IPO, the upcoming rebranding of Penn Virginia shares to ROCC stock is an enticing one to consider. Not only will the newly christened Ranger Oil Corp feature natural synergies for greater revenue potential, the equity unit itself benefits from powerful supply chain dynamics that may reward headline-reading speculators.