Smart for Life (SMFL) stock tanks on debut. What's next for investors?

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 Smart for Life (SMFL) stock tanks on debut. What's next for investors?
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Highlights:
  • On Wednesday, February 16, Smart for Life announced the pricing of its shares and went public in the US equities market.
  • SMFL stock began trading on the Nasdaq Capital Market and tanked on debut.
  • Smart for Life is a marketer and manufacturer of nutritional products, and it received approval to list its shares on February 16.

Since the beginning of this year, the equities markets have remained volatile, and it appears to be affecting the initial public offering (IPO) plans of companies.

So far, IPOs have received a mixed response from investors as some remained skeptical due to market conditions. Meanwhile, few private companies delayed their public debut plans, probably to avoid an unsuccessful start in an equity market.

On February 4, it was reported that Ebanx, a financial technology (fintech) firm delayed its IPO plan. Notably, Ebanx's services have been used by companies like Amazon, Uber, and Spotify.

Also Read: Is Mark Cuban Cost Plus Drug Company IPO happening?

Meanwhile, an HR software company postponed its IPO plans in January, citing market conditions. Due to the Federal Reserve's uncertainty over interest rates hikes, markets have witnessed increased volatility.

What happened with Smart for Life (NASDAQ:SMFL) stock?

On Wednesday, February 16, Smart for Life announced the pricing of its shares and went public in the US equities market. Notably, the company offered 1.4 million shares for gross proceeds of around US$ 14.4 million.

Smart for Life is a marketer and manufacturer of nutritional products, and it received approval to list its shares on the Nasdaq Capital Market.

SMFL Stock                                                                                            ©2022 Kalkine Media® 

The nutritional products marketer started trading under the stock symbol SMFL and began trading during midday on February 16.

The SMFL stock was priced at US$ 10 per share. However, it opened at US$ 3 apiece when the trading session began. During the day, it declined 70.2 per cent to US$ 2.68 per share.

Bottom line

As IPOs have received a mixed response, it is advisable for interested investors to remain cautious. Smart for Life aims to use the money raised from its public debut to pay off all debt.

In addition, the company could use the gross proceeds for general corporate purposes and working capital.

Smart for Life expects that through buy-and-build and acquisition strategies, the company could generate a minimum of US$ 300 million in revenues in the next three years.

The nutritional products company is engaged in developing proprietary products and acquiring profitable companies to drive growth and earnings.

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