[E-Daily Reporter Minji Son ] Rokit Healthcare is drawing significant attention amid expectations that its subsidiary, Rokit America, will list on the U.S. Nasdaq. On the 24th of last month, news that Rokit America had entered the final stage of its listing on the Nasdaq Global Market caused Rokit Healthcare’s stock price to hit the daily price limit of 48,000 won. In effect, the parent company’s stock price rose to the price limit based solely on news of its subsidiary’s planned listing.

The market appears to be focusing its attention on the “Nasdaq listing” itself. However, analysts point out that in the U.S. initial public offering (IPO) market, it is necessary to examine not only whether a company goes public but also which investment bank (IB) is acting as the lead underwriter, what types of companies that underwriter has primarily listed in the past, and how the stock price and trading volume have performed following the listing.

Rocket’s Lead Underwriter, Maxim: 88% of Listed Stocks Trade Below Offering Price

Maxim Group is

the lead underwriter

for

Rocket America’s

U.S. listing. Maxim Group is an independent investment bank specializing in IPOs for micro-cap companies, such as small biotech firms.

In fact, Jay Ritter, a world-renowned IPO expert and professor of finance at the University of Florida, classified Goldman Sachs and JPMorgan as top-tier underwriters, Wells Fargo and Raymond James as mid-tier (regional) underwriters, and Maxim Group as lower-tier in an analysis of U.S. IPO underwriters published last month.

Accordingly, E-Daily’s pharmaceutical and biotech premium content platform, Pharm E-Daily, analyzed 62 cases in which Maxim Group participated as lead manager, co-manager, or underwriting syndicate. As of the 30th of last month, current stock prices were available for 43 of these companies. For the remaining 19, stock prices could not be verified due to mergers and acquisitions, voluntary delistings, or bankruptcy. A prime example is RCS Capital. RCS Capital, which went public in 2013 with Maxim Group serving as the lead manager, entered rehabilitation proceedings in 2016 due to a combination of debt burdens and poor business performance; all existing common and preferred shares were canceled and extinguished. This effectively meant that investors in common and preferred shares lost their investments.

Of the 62 cases analyzed in this study, 30 involved biotech and pharmaceutical companies, accounting for over 48% of the total. Additionally, Asian companies—including those from China, Japan, and Singapore—emerged as a major client group.

Of the 43 stocks for which current prices were available, 38 (88.4%) were trading below their initial public offering (IPO) price. Medirom Healthcare Technologies, a Japanese healthcare company for which Maxim Group served as the sole lead underwriter, went public in December 2020 at $15 per ADS, but as of the 30th of last month, its share price had fallen 93.1% to $1.03. Nexaline Technologies, a medical device company that went public in September 2022, saw its share price fall 92% from $4.15 per unit to $0.33. Medicus Pharma, which went public in November 2024, saw its share price drop 89.2% from $4.13 to $0.40.

Only a few companies have successfully established themselves in the market since their IPOs. Soleno Therapeutics, which went public in 2014 under the name Capnia with Maxim Group as the lead underwriter, saw its stock price rise by over 1,900% in a single year based on clinical results and other factors. The company was later acquired by Neurocrine Biosciences for $2.9 billion (approximately 4.37 trillion won). However, such cases were the exception rather than the rule in terms of overall performance.

Post-IPO Fundraising… Risks Including Share Dilution

Looking at the

post-IPO

trajectories of companies handled by Maxim Group, there were numerous instances where Maxim Group and the listed companies engaged in additional fundraising, such as private investment in public equity (PIPE) or at-market offerings (ATM). In this process, Maxim Group participates again as the lead underwriter or placement agent, creating a structure that allows it to secure fees repeatedly following the IPO.

While micro-cap IPOs involve smaller offering sizes per deal than large-cap IPOs, commission rates are often set relatively high. Furthermore, if the same lead underwriter handles subsequent fundraising rounds after the listing, additional commission revenue can be expected. This means their profits do not depend entirely on whether the stock price rises, as is the case for retail investors.

In fact, after Nexalin Technology went public in 2022 with an offering size of approximately $9.6 million, it raised additional funds by issuing new shares worth $5.25 million in 2024 and $5.32 million last year. Maxim Group participated in both of these follow-on offerings as a placement agent or lead underwriter. Separately, Nexalin also signed an at-market (ATM) agreement with Maxim Group last year for up to approximately $9.78 million. While this structure allows Nexalin to raise funds flexibly as needed and Maxim Group to earn related fees, it raises concerns among existing shareholders regarding potential dilution of their stakes.

Rocket America’s listing underwriting agreement with Maxim Group also features a similar structure. According to the registration statement filed by Rokit America with the U.S. Securities and Exchange Commission (SEC), Rokit America agreed to grant Maxim a right of first refusal for any public or private offerings of shares, equity-linked securities, or bonds conducted within 12 months after the IPO. This effectively establishes a contractual basis for the Maxim Group to generate additional revenue from future fundraising efforts should the IPO proceed successfully.

A securities industry official stated, “While underwriters’ profits are based on fees generated during the public offering and fundraising process, investors’ returns depend entirely on the company’s value and stock price appreciation after the listing,” adding, “One should be cautious about expecting an increase in corporate value based solely on whether the listing is successful.”

Another securities industry official noted, “There are cases where underwriters are exposed to a certain degree of stock price risk by taking on unsold shares,” but added, “The extent to which underwriters are exposed to the risk of future stock price movements for an IPO varies from deal to deal, so caution is required.”