Morgan Stanley's Take on Two New IPOs: OIMAU vs. PAPA

The IPO market is acting as a leading indicator, offering a clear signal about where capital is flowing. After years of muted activity, the U.S. market has staged a robust revival. By mid-December, 342 companies had gone public, marking a 57% year-over-year increase. More importantly, those offerings raised $75 billion, a roughly 80% higher total than the prior year. This surge is a direct reflection of improved conditions: cooling inflation and the Federal Reserve's shift toward rate easing have made equity markets more attractive, drawing capital back in.

This renewed activity sets the stage for the day's financial headlines. In recent days, two new listings have captured attention, serving as a case study in market sentiment. The first, OneIM Acquisition (OIMAU), priced its offering on January 14, 2026. The second, Papa Medical (PAPA), refiled its S-1 prospectus on January 15, 2026, aiming to raise $6 million. These aren't just routine filings; they are the main characters in the current news cycle, drawing the market's search volume and trading focus.

The connection between search volume and capital flows is direct. When a new IPO hits the wires, it triggers a wave of investor inquiry and analysis. This heightened attention often precedes or accompanies the initial capital allocation decisions. For traders, the "main character" of the day's financial headline is a key signal. The fact that OIMAU and PAPA are trending now suggests the market is actively scanning for new opportunities, a sign of underlying confidence. It's a leading indicator that the revival isn't just about big tech or mega-cap names-it's broadening to include smaller, niche listings. This is the new reality for 2026: a market where even a $6 million cannabis vape IPO can command a day's worth of capital flows.

OIMAU: The SPAC Play for Scale and Change

OIMAU is the latest entry in a crowded field of blank check companies, but its structure and mandate align it with a powerful market narrative. The SPAC, led by executives from alternative asset manager OneIM, raised $250 million by offering 25 million units at $10.00. Each unit includes a share and a warrant, a standard setup that gives it a clear capital base to pursue its target. Its stated mission is to acquire companies undergoing change in capital structure, strategy, operations, or growth. This focus on "change" is the key-it positions OIMAU not as a passive acquirer, but as a catalyst for transformation, a role that fits a market increasingly favoring scale and decisive action.

This is where Morgan Stanley's 2026 outlook provides a clear lens. The firm's top retail themes center on "big getting bigger" and idiosyncratic opportunities. OIMAU's mandate to target companies with a "defensible core business" undergoing change directly supports the "big getting bigger" narrative. It's a vehicle designed to consolidate or accelerate growth in established but evolving businesses, exactly the kind of story Morgan Stanley sees as underappreciated. The SPAC's leadership team, drawn from an alternative asset manager, adds a layer of operational expertise that could help drive that change post-acquisition.

The firm's bullish outlook for 2026, bolstered by converging catalysts, further elevates OIMAU's profile. Morgan Stanley's strategists point to solid earnings growth and further Fed easing as key tailwinds, noting that positioning in cyclical areas remains light. This creates a favorable environment for SPACs, which often target cyclical or growth-oriented companies. The market's current underestimation of these forces means a SPAC like OIMAU, with a clear mandate and a seasoned team, could be well-positioned to capitalize on the early stages of a recovery. In other words, OIMAU isn't just another SPAC; it's a thematic play on the very catalysts Morgan Stanley believes are setting up a bullish year.

PAPA: The Specialized Consumer Play

While OIMAU is a SPAC betting on scale through consolidation, Papa Medical (PAPA) is the pure-play in a niche, high-growth sector. The company is a direct entry into the cannabis e-vapor market, a specialized area with clear secular tailwinds. It refiled its S-1 prospectus earlier this week, aiming for a Nasdaq listing with a planned raise of $6 million by offering 1.5 million shares at $4. For the 12 months ended September 30, 2025, Papa Medical booked $50 million in revenue, a solid base for a company of its size.

This is the classic "idio" story Morgan Stanley highlighted in its 2026 outlook. The firm's framework calls for investors to target "high risk/high reward names via housing and 'idio' stories", especially when sentiment is overly cautious. PAPA fits that profile perfectly. It operates in a regulated but expanding niche-cannabis e-vapors-where it has launched approximately 70 series of products and sells in North America, Europe, and the UAE. This is a focused, high-growth area that doesn't require the broad market appeal of a mega-cap, but instead bets on a specific consumer trend gaining ground.

The contrast with OIMAU is stark. OIMAU raised $250 million to pursue a broad mandate of acquiring companies undergoing change. PAPA, by comparison, is a small, single-product company with a tiny capital base. Its entire IPO is a $6 million event, a fraction of OIMAU's war chest. This highlights the fundamental trade-off: PAPA offers direct exposure to a niche growth story, but with a much higher inherent risk profile. Its success is tied entirely to the performance of a single, specialized product line in a volatile industry.

For the market, PAPA represents the other end of the IPO spectrum from the SPAC play. It's the high-risk, high-reward bet that Morgan Stanley's framework suggests investors should consider when navigating an "uneven backdrop." The company's refiled S-1 and planned Nasdaq listing are the main characters in a different news cycle-one focused on a specific consumer trend rather than a financial engineering vehicle. In a market where capital is flowing back in, these two IPOs show the full range of opportunity, from thematic SPACs to pure-play niche bets.

Catalysts, Risks, and the Superior Pick

The near-term catalysts for these two IPOs are starkly different, as are their risks. For PAPA, the primary risk is the uncertain timing of a broader economic recovery. The company operates in a niche consumer discretionary market, and its success hinges on continued spending in the cannabis e-vapor sector. As Morgan Stanley noted, the timing of a broader recovery remains uncertain, and any slowdown in consumer confidence could pressure discretionary spending in its specialized category. This makes PAPA a pure bet on a specific trend, vulnerable to macroeconomic shifts.

OIMAU's risk is more operational. Its entire thesis depends on the success of its acquisition strategy. The SPAC has a $250 million capital base and a mandate to target companies undergoing change. A poor deal or a failure to close any acquisition at all would challenge its core narrative and likely erode investor confidence. The risk here is execution, not market timing.

Synthesizing these points through Morgan Stanley's 2026 lens, the firm likely views OIMAU as the superior pick. The firm's top retail themes center on "big getting bigger" and idiosyncratic opportunities. OIMAU's mandate to acquire companies with a "defensible core business" undergoing change directly supports the "big getting bigger" narrative. Its larger capital base provides the firepower to make transformative deals, a key advantage in a market where scale is paramount. In contrast, PAPA represents the "high risk/high reward" idio story, but its tiny $6 million IPO size limits its strategic impact.

The bottom line is one of strategic alignment. In a market where capital is flowing back in and Morgan Stanley sees a rolling recovery taking shape, the more strategic bet is on a vehicle positioned to capitalize on scale and change. OIMAU offers that through its SPAC structure and mandate, while PAPA offers pure niche exposure. Given the firm's bullish outlook for cyclical areas and its emphasis on "expensive leadership," OIMAU represents the more compelling vehicle for investors seeking to ride the early-stage recovery.