The online and offline education services provider, Genius Group Ltd. (GNS) made its public debut yesterday, April 12, 2022. Despite certain red flags regarding the IPO of the Singaporean EdTech company, the debut session marked a staggering increase of 408.33%. Thus, the stock closed its debut session on NYSE at $30.50 a share. Consequently, in today’s premarket, on April 13, the stock is under corrections. At the time of writing, the stock had slid down by 38.85% to reach $18.65 apiece.
GNS’ Initial Public Offering
On April 12, the ordinary shares of the company commenced trading on the NYSE American under the symbol “GNS”.
The initial public offering of the company consisted of 3,763,636 ordinary shares at a price of $6.00, including the over-allotment option.
With Boustead Securities, LLC as the sole underwriter, the IPO resulted in gross proceeds of $22,581,816 for the company.
IPO Revisions and Downsizing
The company’s IPO is a bit questionable with many changes in the final launched IPO against its initial documents. GNS’ SEC filings reveal that the company was initially looking forward to launching an IPO of at least 7.3 million shares. Thus, the expected proceeds were in the range of $40 million. Moreover, the book runner was Think Equity. Following this, the company downsized its IPO by over 55% to 3.2 million shares for proceeds of just $18 million. But the final IPO included 3.7 million shares and resulted in proceeds of $22.6 million. Furthermore, the company also switched its underwriter from Think Equity to Boustead Securities.
Questionable Debut Session
Genius is not a well-established company with just over 2 million students in 200 countries. The company only has $24.2 million in 2020 pro forma revenues from four different lines of business, according to its prospectus. The company in itself is a mishmash hodgepodge of different things including an EdTech platform, a property investors network, entrepreneur resorts, and a small for-profit university in California among other assets.
In addition to this, the downsized and small IPO of the company would have had investors staying away from the stock. But despite the red flags, the stock’s debut session was wild with gains, unlike anything one would have expected.
It seems short investors were trying to push the stock high enough to make some good gains by leveraging its small IPO price of $6. Hence, now the investors are taking profits as the stock has fallen under corrections and is probably on its way to its initial price levels.