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Since the discovery of DNA — first identified during the 1860s by Swiss chemist Johann Friedrich Miescher and later its structure thanks to the groundbreaking work of James Watson and Francis Crick — the broader life sciences industry has eagerly focused on harnessing this knowledge for the betterment of humanity.
Potentially, genetic sequencing innovations provide the key to addressing the various ailments afflicting global communities, thereby driving the case for the initial public offering (IPO) of SeqLL. A development-stage biotechnology firm, SeqLL’s research in single-molecule sequencing for elucidating disease composition has garnered much interest amid the COVID-19 pandemic.
When Is the SeqLL IPO Date?
Following a years-long delay that saw the life sciences firm swing in and out of the IPO calendar, SeqLL finally made its public market debut on August 27, 2021. Shares trade on the Nasdaq exchange under the ticker symbol SQL.
A day earlier, SeqLL announced the pricing of its public offering — consisting of 3.06 million shares of common stock and accompanying warrants to purchase up to the aforementioned number of shares — at $4.25 per unit. Total gross proceeds amounted to just a hair over $13 million, excluding underwriting discounts and offering expenses. Assuming the satisfaction of customary conditions, the IPO will close on August 31.
Maxim Group, a full-service investment bank, securities and wealth management firm, provided the sole bookrunning management services for the IPO. Based on SeqLL’s corporate statement, the biotech company will use the proceeds from its public market debut to “expand its commercial operations to support life sciences research and applications development,” with a keen interest toward developing “novel assets across multiple emerging growth areas.”
Though an exciting time for SeqLL investors and the wider biotech industry amid the ongoing COVID-19 crisis, prospective buyers should note that this isn’t the 1st time the company attempted to go public.
According to government records, SeqLL filed an IPO prospectus with the U.S. Securities and Exchange Commission (SEC) on April 22, 2019. At the time, the company planned to raise $8 million through an offering of 1.4 million shares at a price ranging between $5.40 and $6.40. However, a year and 2 days later, the biotech withdrew its IPO plans.
More than likely, the devastation of the initial breach of the coronavirus pandemic contributed to the withdrawal decision. As Wired noted during the 2000s tech boom-and-bust sequence, the time delay from filing an IPO to distribution of shares can make a promising stock “look embarrassingly outdated” if it catches the wrong side of the business cycle.
While SQL stock did move higher by 7% against its initial offering price, the historical volatility of IPOs — especially those tied to the biotech industry — warrants vigilance with SeqLL.
SeqLL Financial History
Above everything else, those who are interested in acquiring shares of SQL stock must remember one critical fact: SeqLL is an aspirational investment. Indeed, management itself stated on its amended IPO prospectus with the SEC that SeqLL is an “early, commercial-stage company with a limited operating history.”
To be 100% clear, there’s nothing wrong with aspirational organizations. For instance, Apple (NASDAQ: AAPL) sought to put a personal computer in every home. Today, the consumer tech firm not only accomplished that goal but pioneered the concept of connected smart devices. More recently, Tesla (NASDAQ: TSLA) transitioned the company from a chronic cash flow pit to dominating the next generation of personal mobility solutions.
In SeqLL’s case, the biotech firm’s proprietary assets and innovations, including its True Single Molecule Sequencing (tSMS) technology, potentially allow medical researchers and clinicians to promote significant advancements in healthcare by “accelerating one’s understanding of the molecular mechanisms of disease and fundamental biological processes.”
As such, SeqLL can transition toward several areas of need, ranging from chronic diseases to underserved medical conditions to pandemics — the latter carrying tremendous interest due to the devastating human and economic cost of the COVID-19 crisis.
At the same time, SeqLL’s lack of financial robustness brings up a key obstacle of aspirational biotech firms: return on investment (ROI). Basically, investors want to see it (preferably on the positive end of the spectrum) and enterprises need to provide it. Unfortunately, strong ROI will be a tough challenge for SeqLL.
In the 6 months ending June 30, 2021, the company only generated revenue of $124,129. More worryingly, it posted a net loss of $1.67 million in the same period. In fact, management stated in its prospectus that it may have difficulty attracting investors due to its troubled financial picture, which clearly necessitates extensive due diligence before proceeding further.
While SeqLL has not overtly emphasized a connection between its life science assets and the current coronavirus pandemic, it hasn’t been difficult for prospective buyers to connect the potential dots. For starters, the global health crisis and the subsequent vaccine rollout introduced the international public to not only the importance of advanced healthcare solutions but also their practicality and viability.
Most importantly, SeqLL’s tSMS solution is powerfully and intractably relevant in light of the SARS-CoV-2 outbreak and its myriad mutations. According to a research paper on PLOS One, a peer-reviewed scientific journal published by the Public Library of Science, single-molecule sequencing technologies have been pivotal for the “direct detection of the viral genetic material from patients’ samples.” Therefore, the innovation “establishes a platform for diagnostics of COVID-19, which could also be adjusted to diagnose additional pathogens.”
While promising, you must bear in mind that development-stage biotechs (such as SeqLL) are fraught with danger because they’re at the lowest rung of the commercialization journey. From here, SeqLL must navigate pre-clinical trials, then move onto the more rigorous clinical trials, of which there are 3 phases.
Assuming successful completion of earlier trials, each new phase incurs extensive time and money — the latter of which SeqLL might run out of. That’s why more than 90% of therapeutics and assets fail to emerge from Phase I trials.
How to Buy SeqLL IPO (SQL) Stock
While aspirational firms over the last year-and-a-half period have decided to enter the public market via reverse mergers with special purpose acquisition companies (SPACs), SeqLL may have one key advantage to its name: it went public through the traditional process.
On one hand, the primary market transaction that occurs between IPO underwriters and their choicest clients (almost always institutional investors) tends to box out retail investors. Instead, regular folks interested in traditional IPOs usually must wait to buy new shares on the open market, also known as secondary transactions.
But this bread-and-butter approach enjoys the benefit of a much more extensive vetting process than what SPACs go through. Further, the process of acquiring shares at the open is intuitive if you know how to buy stocks. If not, follow the steps below.
Step 1: Pick a brokerage.
IPOs are a numbers game, meaning that you’ll likely need to participate in several new offerings to accrue the most benefit. As such, you may want to narrow your choice of best brokers to platforms that extend pre-IPO access (or the ability to buy shares at their initial offering price) for select enterprises.
Step 2: Decide how many shares you want.
As a numbers game, you want to approach IPOs with balanced share counts which open up reward potential but limit downside risks.
Step 3: Choose your order type.
Before trading, familiarize yourself with these market concepts.
- Bid: The buyer’s best offer, the bid is always lower than the ask.
- Ask: The seller’s bottom-dollar price, the ask is always higher than the bid.
- Spread: Primarily the difference between the bid and ask price, the spread also implies market liquidity and risk. Tighter spreads indicate higher liquidity and lower risk due to plentiful trader involvement, while wider spreads indicate a low-volume market, entailing higher risk.
- Limit order: A predetermined price-dependent trade request, limit orders provide transparency but no execution guarantees.
- Market order: In contrast, market orders guarantee fulfillment but only at the current rate, which may fluctuate significantly during order processing.
- Stop-loss order: A defensive mechanism, 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, affording transparency in your automated exits. 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:
- 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).
SQL Restrictions for Retail Investors
Before jumping on any IPO, consult the Financial Industry Regulatory Authority (FINRA) rules on restricted persons. Securities laws impose harsh penalties for those caught using privileged information.
Thanks to the services of companies like ClickIPO, which buy blocks of select entities with public market ambitions for eventual distribution to their members, more retail investors have the opportunity to procure new issues than ever before. Serious IPO participants should consider opening an account with ClickIPO.
A Genetics IPO for the Intrepid
By enabling the accurate deciphering of disease composition, SeqLL may hold the key to paradigm-shattering breakthroughs in medical care. In addition, the company’s IPO received a sentiment boost from the relevance of gene sequencing in the battle against COVID-19. However, you should only gamble here with speculation funds due to SQL’s enormous financial risks.