The shares of Prestige Wealth (NASDAQ:PWM), a Hong Kong-based wealth management and asset services provider, just started trading yesterday. Today PWM stock is trending on social media and is up more than 120%. This seems like another case of investors piling into a speculative initial public offering (IPO) trade. Also worth noting is that, according to Yahoo Finance, PWM’s float consists of just 3 million shares.
The PWM Stock IPO and Prestige Wealth
Yesterday PWM launched its IPO, with the company pricing the IPO of 1 million ordinary shares at $5 each. On their first day of trading yesterday, the shares climbed 8% to $5.40. At 8:15 a.m. today, PWM stock had more than doubled to $10.35 in pre-market trading. Prestige Wealth stated that it anticipated obtaining “aggregate gross proceeds of ($5 million) from the Offering, before deducting underwriting discounts and other related expenses.”
The firm stated that it intends to utilize the funds raised from the IPO “for brand promotion, hiring of additional client relationship managers and employees, expansion of products and services, and general working capital.”
Prestige Wealth reports that it specializes in helping wealthy individuals based in Asia invest their funds. PWM also manages its own investment funds, and the firm was incorporated in 2018.
The company’s website suggests that PWM helps its clients access a wide variety of investment products and services, beyond what typical individual investors have exposure to. For instance, its website says that PWM has funds that invest in quantitative hedge funds from around the world.
What Investors Should Consider Going Forward
Investors should consider the extent to which PWM’s business will be affected by negative economic trends in China. They should also weigh the possibility that PWM stock is being boosted by typical IPO hype that will soon fade, causing the shares to sink in the not-too-distant future.
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Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Larry Ramer did not hold (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.
