Unitree Robotics is preparing for its IPO, with traders predicting a valuation jump to $38 billion, significantly above the initial $9 billion.
Unitree Robotics is gearing up to launch its initial public offering (IPO), with traders on Hyperliquid forecasting that its market valuation could soar to $38 billion, significantly exceeding the IPO price.
Market Valuation Predictions Surge Ahead of IPO
Analysts at Allium report that traders are projecting a nearly $38 billion valuation for Unitree, compared to the $9 billion initial valuation set for its IPO. This disparity could pose risks for those holding leveraged positions as trading begins.
The company has priced its shares for the Shanghai STAR Market at 150.80 yuan ($22.37), leading to an initial market capitalization of about $9 billion. However, perpetual contracts on Hyperliquid suggested valuations ranging from $92 to $94 on Friday, indicating a potential market cap of around $38 billion, according to Allium.
This impressive premium reflects the optimism surrounding the Hangzhou-based robotics firm, established in 2016, which develops four-legged and humanoid robots for various sectors, including industrial and consumer markets. Last year, Unitree achieved revenues of $253 million, a staggering 335% increase, with over 5,500 humanoid robots sold.
The IPO has attracted massive interest, being oversubscribed by retail investors by a factor of 8000. Trading is expected to commence between August 17 and August 21.
Emerging Market for Pre-IPO Contracts
Unitree's IPO is occurring amidst a rising trend in the crypto derivatives market, specifically with pre-IPO perpetual futures. Hyperliquid has positioned itself as a leading platform for these derivatives, allowing traders to speculate on a company's future valuation without acquiring actual shares.
This trading option has recently expanded into sectors beyond cryptocurrencies, including commodities and private firms like Unitree. Historical data indicates that recent IPOs have closely matched their opening market prices, such as the successful predictions surrounding CXMT's debut in July and SpaceX's anticipated valuation.
Market Dynamics and Potential Risks
Pre-IPO trading for Unitree has already seen considerable activity, with markets on Hyperliquid accumulating $9.1 million in open interest and around $59 million in trading volume. The average price difference across markets was a mere 1.6%, with recent trades around $92 and $94, suggesting a potential upside of over 300% from the IPO price.
Despite the optimistic outlook, the fourfold premium could result in substantial losses for leveraged traders. If Unitree opens at double its IPO price, it might liquidate a significant portion of long positions. For example, an opening price of around $45 could liquidate about a third of long bets, while a price of $128 could wipe out more than half of short positions.
Market positioning shows a near equilibrium on Trade.xyz, with approximately $6.5 million in long bets versus $6.6 million in short bets. However, smaller trades under $50,000 have predominantly been bearish, with 70% of these bets placed short. Analysts note that any significant movement from current price levels could trigger exits from one side of the market.
