Friends, today's AI stock action on A-shares and Hong Kong exchanges was more entertaining than any meme.

The protagonist is Reconova (HK: 07656), billed as the "first visual embodied AI stock," officially listing on July 8. But the risk education lesson it delivered to IPO subscribers wasn't one class — it was two.

First class: the July 7 gray market. After opening, it surged as high as HK$25 (+15.4%), then crashed to HK$16.07 (-25.8%), closing at HK$17.99 — down 16.94% from the HK$21.66 offering price, with 41.23% intraday swing on HK$53.1 million turnover. FOMO chasers were down 20%+ the same day; widespread despair.

Second class: the July 8 official debut. It opened at HK$18, extending the gray market decline, then tumbled as deep as ~HK$15.6 (-28%) in intraday trading, looking like a total collapse. But in a violent late-session rally, it staged a sharp V-shaped recovery to close near HK$21 — only about 3% below the offering price. From the HK$15.6 low to the ~HK$21 close represented an intraday rebound of over 34%. Those who bottom-fished in the gray market and held to close were actually in the green; those who panic-sold at the open sold right at the lows.

Across two days, from the gray market high of HK$25 to the intraday debut low of HK$15.6 and back to the ~HK$21 close, the cross-day swing exceeded 50%. That rollercoaster was more thrilling than any AI-generated rollercoaster video.

No Cornerstone + No Greenshoe = Listing Naked

Friends, you know what's ballsiest about this Reconova IPO? It brought in zero cornerstone investors and had no greenshoe (over-allotment option) mechanism.

A quick primer for those unfamiliar with Hong Kong IPOs. Cornerstone investors are institutions that lock in shares pre-IPO, committing not to sell for six months post-listing. Having cornerstones signals the market: these professional institutions endorse this valuation — retail investors can follow with confidence. The greenshoe mechanism lets underwriters buy additional shares from the company to stabilize the price if it breaks issue — basically an "official price support." When a Hong Kong IPO has neither, it's like streaking onto the market — price movement is entirely driven by free market forces with no cushion whatsoever.

Reconova's offering was truly "full free float + thin shell" — the global offering of 28.087 million shares represented only about 9% of post-offering share capital. A tiny float with loose chips makes it easy for capital to pump and dump. Which is exactly why we saw these two days of surreal action: gray market FOMO chasers got trapped; opening panic-sellers sold the bottom; the late rally forced short covering and drew momentum chasers — a classic long-short squeeze. This price action is textbook small-cap with no lock-ups and no price support: with no institutional holdings and no underwriter stabilization, the price is driven purely by short-term capital sentiment.

What does Reconova actually do? The official line is "visual embodied intelligence" — basically computer vision and AI perception technology applied to smart retail, security, and intelligent driving. It posted 2025 revenue of 443 million RMB but a net loss of 68.14 million RMB, with gross margin declining from 40.8% to 37.7%, and receivables of 708 million RMB — 1.6x revenue. Not a bad sector, but it's at some remove from the sexier concepts the market is hyping: "large models," "Agents," "humanoid robots." Founded in 2012, Reconova is an older computer vision AI company that never saw explosive growth.

The Temperature for AI IPOs Has Changed — But Not How You Think

Reconova's surreal two-day ride sends a signal that may differ from popular intuition.

When the gray market dropped 17%, many declared "the AI IPO bubble has popped" and "the secondary market doesn't want AI." But when the stock violently rallied back to HK$21 in late trading, others proclaimed "V-shaped reversal, AI is still hot." Friends, neither take gets to the point. The real signal isn't that "AI IPOs will drop" or "AI IPOs will rise" — it's that AI small-caps listing naked without cornerstones or greenshoes will experience extreme price volatility that ordinary retail investors simply cannot predict or withstand.

Just two weeks ago, the news that Unitree Robotics cleared STAR Market review in a record 104 days was everywhere, with the market cheering "the first embodied AI stock is here." Reconova's cold water isn't saying embodied intelligence or AI vision is a bad sector — it's reminding investors: don't just fixate on the "first stock" halo; look at the offering structure — are there cornerstone lock-ups? Is there a greenshoe? How big is the float? What about receivables? Is cash flow healthy? The fanciest technology on PowerPoint won't prevent wild post-IPO swings when the company is loss-making, has receivables at 1.6x revenue, and a current ratio of just 1.17.

This stands in contrast to the AI IPO frenzy of 2023–2024. Back then, as long as the story was good — "building large models," "building Agents," "building embodied AI" — retail subscribers could blindly buy in and profit, with or without cornerstones, regardless of valuation. Not anymore. Investors are differentiating: AI companies with real earnings, cornerstone backing, and sound offering structures will still be sought after; but concept companies listing naked without performance backing will have extreme volatility educating the chasers.

An even more interesting comparison: 36Kr reported the same day that Snapmaker (consumer 3D printing) closed a 1 billion RMB funding round — the largest consumer 3D printing round in two years — driven by the U1 product delivering 10x year-over-year revenue growth. Hardware companies with real products, real revenue, and real growth are still getting funded in primary markets.

Friends, I'm not saying Reconova is a bad company or that it will definitely drop going forward. The fact that it rallied back to HK$21 into the close shows capital is willing to support it at that level, and further upside can't be ruled out. But a 50%+ two-day swing, no cornerstones, no greenshoe, a 28% intraday drop followed by a sharp rebound — taken together, they remind everyone interested in AI investing: the AI bubble isn't in primary markets; it's in the moment you go all-in blindly, ignoring offering structure and fundamentals, chasing nothing but the "first stock" halo.

That's all the roasting for today. More tomorrow.