San Diego's Hempacco pulls off a rare initial public stock offering in today's volatile market

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Hemp cigarette makers' IPO is one of only two in San Diego so far this year, compared with 14 local companies that went public in 2021.

San Diego’s Hempacco, a maker of nicotine-free hemp cigarettes, managed to pull off something that few local companies have done this year — price an initial public stock offering.

Hempacco’s stock opened at $6 and jumped to $7.28 on its first day of trading. But the shares have sold off since, closing Wednesday at $3.48 on the Nasdaq exchange.The company originally sought to sell 3 million shares and raise $15 million. But volatile stock markets have spooked IPO investors. Hempacco decided to go ahead with a smaller stock sale now, with the possibility of a secondary offering later if conditions improve, said Chief Executive Sandro Piancone.

Only two tiny San Diego companies have priced IPOs in 2022 — Hempacco and Belite Bio, which went public in April. They raised a combined total of $42 million. In both cases, parent companies maintained majority shareholder voting control of the firms after their IPOs. Nationally, it’s a similar story. The number of IPOs on U.S. stock exchanges is down 75 percent through June 30, with just 54 companies going public, according to the EY Global Trends Report.

 

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