Monogram Orthopaedics is going public on May 18! The company is going to list on the Nasdaq under the ticker MGRM.
The company will go public at $7.25 per share. But don’t worry if this price seems low. Monogram recently completed a two-for-one stock split. So the split-adjusted stock price is actually $14.50, valuing the company at $246 million.
Some investors — but not all — will be subject to a lockup period. (The lockup period is to prevent early investors from selling all at once, which could depress share prices during the IPO.) Investors in the November 2022 Dalmore Reg A raise ($10.01/share) will be subject to the six-month lockup period. Therefore, if you are an investor in that round, you will have to hold on to your shares for six months before you can sell them. However, for ALL other crowdfunding rounds, investors will NOT be subject to the six-month lockup period. Therefore, you will be able to immediately sell your shares on May 18.
If Monogram is trading at $7.25 when you are able to sell shares, gains in all prior rounds are as follows:
- March 2020 SeedInvest Reg A round ($4/share) → return with dilution: 262.5% (3.62x)
- February 2022 StartEngine Reg A round ($6.27/share) → return with dilution: 131.26% (2.31x)
- November 2022 Dealmaker Reg CF round ($10.01/share) → return with dilution: 44.86% (1.45x).
If you invested in the 2020 round, you may be wondering why the valuation has clearly 10xed, but your investment return at IPO is just 3.62x. The answer is dilution.
An IPO is a primary offering of securities, meaning that Monogram will be issuing new shares to the public and keeping the proceeds to help grow the business. Additionally, the company has issued new shares in all subsequent Reg A rounds, diluting your position even more.
This is simply how companies go about raising equity capital. Dilution is a part of startup investing and something investors must be comfortable with. With a robotics company like Monogram, raising massive amounts of capital is required to get a product to market — particularly when it requires FDA approval. This $30 million IPO will give Monogram the capital it needs to finally commercialize its surgical robot. And if you hold on to your shares and Monogram continues on its current trajectory, I still firmly believe that you will see a 10x return eventually. In that vein, let’s quickly discuss why Monogram is so uniquely positioned to become a massive player in surgical robotics.
A Market Ripe for Disruption
Only 12% of knee replacements, 3% of hip replacements, and 3% of shoulder replacements use robots to assist surgeons. And of those, Mako owns more than 90% of the market. As we’ve mentioned in prior reports, Monogram’s robotic technology is simply far more advanced than anything used by Mako, whose technology is still first-generation from the 1980s and 1990s. Mako has had no incentive to innovate, so the market is clear and obvious for Monogram to disrupt. And since a very small portion of surgeries are completed with robots, the market will continue to massively grow long into the future. For this reason, Monogram seems poised to give investors very solid returns over the long run.
If you want to learn more about Monogram, check out our Analyst Report on the company.
Current Reg A Round
Finally, you may be wondering why Monogram has a current round open on Dealmaker at the IPO terms. This is because Monogram is going public via Reg A. In order to do that, the company must have a round open at the same terms. Therefore, if you invest in this private round, you will still be subjected to the six-month lockup period once Monogram goes public. Therefore, it is best to just wait until the company IPOs before purchasing new shares. But if you do want to invest in this round, your money has to be in by May 10.
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The equity crowdfunding market has KingsCrowd.
About: Teddy Lyons
Teddy comes to KingsCrowd with a background in venture capital and investment banking. He worked at Deutsche Bank as an Investment Banking Analyst in the Technology, Media, and Telecommunications group. Prior to that, he served as an Associate at Alchemi Capital, a venture capital firm in Boston that invests in early-stage technology companies. Teddy holds a degree in Economics and Psychology from Wesleyan University, where he was captain of the varsity soccer team. He is currently enrolled in the M.S. in Finance program at Boston College.