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Agiliti Inc. (OTCMKTS: AGLY) is trading in the over-the-counter market right now and it will be listed on the NYSE very soon.

What is the price reaction of this stock on the IPO day? Will the price on the IPO day be similar to the over-the-counter price right now?

I also searched the SEC filing database. The company has not filed any financial report in the last two years. Of course, it filed Form S-1 two months ago.

The over-the-counter price is $10.51 right now, and the estimated IPO price is between $18 and $20. The IPO price is a lot higher than the over-the-counter price, so I am wondering how the price will change on the IPO day.

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Note that the $10.51 price could be misleading because:

  • It is the price of the last trade that happened about two weeks ago (on 2021-04-09).
  • The stock is illiquid ($10.00 bid for 100 shares, and no offers).

As @SRiverNet mentioned, the actual IPO price could be different from the estimate of $18 to $20 per share. Indeed, that was what happened. One day before the IPO, the IPO price was reduced to $14 (press release: Agiliti Announces Pricing of Initial Public Offering). The shares opened at $16.05, which is again below the estimate.

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  • Yes. I think you are right. But I am curious that: if I bought one share of AGLY yesterday, will my share be automatically converted to one share of AGTI today? This is an interesting question and I hope to know the answer. – Jerry Zhang Apr 23 at 19:05
  • @JerryZhang I don't know. Perhaps you could contact Agiliti's investors relations to find out. When you do, please update us on what you found. – Flux Apr 23 at 23:18
  • Yes. I will try to contact Agiliti's investors relations. Did you say when you tried to buy 100 shares yesterday, you couldn't because nobody was selling AGLY? – Jerry Zhang Apr 24 at 2:42
  • @JerryZhang Correct, because it is an illiquid OTC stock. If you managed to buy the stock, it's likely that the price you paid would be higher than $10.51, possibly much higher. – Flux Apr 24 at 3:16
  • @JerryZhang Did you get a response from Agiliti Inc.? – Flux Apr 30 at 4:14
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Without studying the financials and more information about the company it is difficult to gauge investor reaction to the IPO. My guess is that its current price is only a reflection of the news it was planning to go public on the NYSE, since the stock was trading down around $2 prior to November of 2020.

What the offer price is now doesn't mean it won't change (and it can go down or up) prior to the IPO. Just from a brief glance, they're making about 24% of the company's shares available, so there are a LOT of shares held/controlled by company insiders, and that could make it difficult for the stock to do much once those shares are eligible to trade. Basically, for every publicly trading share there will be THREE shares held by company insiders.

EDIT

Here's a good article on what happens when a company moves from the OTC to NYSE

https://www.investopedia.com/ask/answers/08/otc-nyse-nasdaq.asp

I will say that any time a company like this files an S-1 with a 22-page "RISK FACTORS" section it scares the crap out of me. READ THIS SECTION and you will have a good idea of the headwinds this company is facing and how its past is going to work heavily against it (most notably, pension contribution deferrals since 2002, more than $940 million of debt, etc.)

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  • Thanks. But, Agiliti has not filed any financial report for almost 2 years. I think there is no way to know how many outstanding shares Agiliti has. So, there is no way to know the exact valuation this company. This makes me wonder the recent price movement of Agiliti may not be due to the IPO announcement. Moreover, Agiliti will change a ticker symbol after IPO. I don't know whether this matters. – Jerry Zhang Apr 21 at 19:37
  • Also, if you buy AGLY today, will the share be converted to AGTI on the IPO day? – Jerry Zhang Apr 21 at 20:03
  • @Jerry, if you read the S-1, it tells you how many shares there will be in the new entity. See my edited answer for the link to an article that explains what happens when a company moves from OTC to NYSE. – RiverNet Apr 21 at 20:25
  • I see your point about the 940 million of debt. But this company has 1,903m total assets and 1461m total liability. The total liability has included the 940 million pension debt. So, the pension debt should not be a problem, right? – Jerry Zhang Apr 21 at 23:37
  • Be careful what you assume. They list 22 pages of risks for a reason. Don't fall in love just because their tentative IPO price is above their current price. The lack of reliable reports on them is concerning. Do your research and be careful if you decide you have to invest. – RiverNet Apr 22 at 0:20

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