What effect will the full exercise of the over‑allotment option have on MKLYU’s post‑IPO share supply and price dynamics?

The full exercise of the 30 % over‑allotment option adds 2.25 million units to the IPO float, taking the total post‑offering share supply to 17.25 million units (≈ $172.25 million of gross proceeds at the $10 price). That extra 13‑15 % of float dilutes the initial investors and immediately raises the number of shares that can be traded on the market, which normally exerts down‑side pressure on the opening price because market participants must absorb a larger supply at the same $10 benchmark. In practice, the added liquidity also helps to narrow bid‑ask spreads and can reduce extreme volatility in the first few trading sessions, but the net effect is often a modest pull‑back from the IPO price as sellers—including the underwriter’s “greenshoe” shares—look to lock in gains.

From a technical standpoint, the larger float means the price will need a higher volume base to sustain any breakout; the $10 IPO price now sits at a key psychological level and will likely act as short‑term resistance. Traders should watch the first‑day opening relative to $10 and the early‑session order flow. If the stock opens below $10 with brisk selling, a buy‑the‑dip strategy could be justified provided the company’s acquisition pipeline and balance‑sheet fundamentals remain solid. Conversely, a clean, near‑$10 open with tight ranges suggests the greenshoe has been absorbed without major price disruption, and the market may be ready for a short‑term rally on the back of fresh liquidity.

Actionable take‑away:

- Monitor the first‑hour price action: a drop of >2‑3 % below $10 signals that the over‑allotment supply is being aggressively sold, creating a short‑term entry point for quality‑oriented buyers.

- Set tight stop‑losses just below the $9.70‑$9.80 zone, as the enlarged float can trigger rapid moves if institutional sellers unwind.

- Watch the post‑greenshoe lock‑up expiry (typically 90‑180 days). When the initial insiders’ shares become tradable, the cumulative float could swell beyond 20 million, adding another layer of downward pressure; positioning now with a clear view of supply dynamics will help capture any upside before that later dilution event.