Health Catalyst Could Slump When Lockup Expires

Early Market Performance

The underwriters for Health Catalyst priced its IPO at $26, above its expected price range of $24 to $26 per share. The stock has had a mixed performance. It reached a high of $48.63 on August 12 then began to decline reaching $26.44 on October 9.

Conclusion

When the IPO lockup for HCAT expires on January 21, pre-IPO shareholders and company insiders will be able to sell over 28 million currently restricted shares and cash in on their gains. Despite mixed trading, we believe they will be eager to do so with HCAT's more than 50% gain from IPO. This group of pre-IPO shareholders and company insiders includes numerous executives and VC firms.

(Click on image to enlarge)

(Source: S-1/A)

With just 8 million shares trading pursuant to the IPO, any significant sales of currently-restricted stock could flood the secondary market for HCAT and cause a sharp, short-term downturn in the share price. Aggressive, risk-tolerant investors should consider shorting shares of HCAT ahead of the IPO lockup expiration. Interested investors should cover short positions during the January 22nd and January 23rd trading sessions.

1 2 3
View single page >> |

Disclosure: I am/we are short HCAT.

Disclaimer: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.