Have you heard of Nano Labs (NASDAQ:NA)? If not, that’s okay. After all, it’s not even a public company — yet. However, the NA stock IPO has investors’ attention as it comes at a difficult time in the stock market. Scheduled for Tuesday, investors are eager to see the market’s risk appetite for the Nano Labs IPO.
What does Nano Labs do?
The company is a metaverse-focused chipmaker. According to the company:
Nano Labs is a leading fabless IC design company, dedicated to the development of HTC (High Throughput Computing) chips, HPC (High Performance Computing) chips, distributed computing and data storage solutions, and other solutions. … Nano currently has three categories of products including HTC solutions, HPC solutions and distributed computing and data storage solutions.
Further, it’s estimated that the “global fabless IC design market increased to $170 billion in the past four years.”
However, the IPO does not come at the best time in the market.
Breaking Down the NA Stock IPO
The NA stock IPO comes at a time when tech stocks in general are struggling through a bear market. Worse, semiconductor stocks are badly wounded and growth stocks have been obliterated. The IPO also comes at a time when there is not much appetite for risk at all. Stocks have badly struggled, while cryptocurrencies have been crushed. Investors haven’t even been able to hide in safe havens like bonds or gold.
As it relates to cryptocurrencies, Nano Labs faces more potential headwinds. In the “Risks Relating to Our Business” section of its Form F-1, the company lists two concerning notes. They include:
- Volatility of the cryptocurrency market.
- Significant revenue contribution from our cryptocurrency mining machines.
As for the actual Nano Labs IPO, the company recently reduced the size of its offer. Previously, the company planned to offer 3.5 million American Depositary Shares (or ADSs) between $9.50 and $11.50.
Now though, Nano Labs plans to offer 1.77 million shares — roughly half — between $11.35 to $11.51 per ADS. In other words, less shares offered at the higher end of the range.
Does that mean the NA stock IPO will be a flop? No, not necessarily. However, there’s no denying that the IPO comes at a difficult time in the market while investor sentiment is incredibly low.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.