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Don't Go Long on SPACs

The message seems clear given recent deSPAC performance and continuing short seller reports -- SPACs are a yield play and investors shouldn't hold beyond ex-redemption.

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The SPAC narrative continued to be largely unchanged, but the mood is certainly darkening as the increasingly consistent and poor deSPAC performance weighs on the market. Almost every recent deSPAC is closer to $7 than $10 (see below for more) and investors must be thinking anyone that holds a SPAC through ex-redemption is crazy. 

For true believers in any SPAC deal, they should consider making a position after the deSPAC ticker settles -- at which point it is likely going to be at a nice discount to where it was before deSPAC. 

This trend only reinforces SPACs as a yield play for now. When will it change? Not until the oversupply is gone, there are only a handful of trusted, proven sponsors and the deals are better.

DNA / Ginkgo BioWorks Gets Shorted by Scorpion

It's no surprise that another recent deSPAC is being attacked (rightly or wrongly) by short sellers. Today Scorpion Capital came out with a scathing set of research that drove the stock down significantly.

DNA ended the day down -11.60 at $10.59 and continued its decline into after hours. There is likely more to come on DNA over the next days and weeks, but if it ends up like the majority of other recent deSPACs (see below), investors can expect to see it close to $7 than $10 in the near future.

DNA dropped -11.6% as Scorpion released its short report

DNA dropped -11.6% as Scorpion released its short report

Are Quantum Computers the New Trend in SPACs?

It happend with EVs, Lidar, and more. SPACs seem to love to move in herds and the current trend may be around quantum computers. DMYI took IonQ public and is now IONQ -- now down to $7.25 which is 32% from its high right before deSPAC. 

Today, SNII - Supernova Partners Acquisition Company II announced a deal with Rigetti Co, Inc. The deal values Rigetti over $1B in a space that many believe has massive potential, yet is in the earliest of days. There a pure play competitor such as IONQ and behemoths like IBM and Google / Alphabet who both are major players. Investors in pure play quantum players will be taking significant risk, but for some, it may be worth it.

SNII closed the day at $9.86, up about 1%. Given the deSPAC performance of IONQ, investors that want to go long on SNII / Rigetti may want to wait for the deal to close and the deSPAC price to settle. There is very little, if any, recent experience that shows investing pre deSPAC is the right play.

DeSPACs Getting Hammered

It's been tough going for nearly every deSPAC of late. Some of the most recent are shown below and almost all are significantly down for $10. And, as discussed above, DNA is now under significant pressure and looks to be on the way down as well.

$ 6.32 | MAAC - Montes Archimedes Acquisition Corp --> Roivant Sciences (ROIV)
$ 7.25 | DMYI - dMY Technology Group Inc III --> ionQ, Inc. (IONQ)
$ 6.50 | CTAC - Cerberus Telecom Acquisition Corp --> Kore (KORE)
$ 10.07 | LATN - Union Acquisition Corp. II --> Procaps Group (PROC)
$ 6.26 | STPC - Star Peak Corp II --> Benson Hill, Inc. (BHIL)
$ 7.40 | SPFR - Jaws Spitfire Acquisition Corporation --> VELO3D (VLD)
$ 6.25 | PTK - PTK Acquisition Corp. --> Valens Semiconductor (VLN)
$ 7.65 | GLEO - Galileo Acquisition Corp. --> Shapeways, Inc. (SHPW)
$ 7.29 | CAHC - CA Healthcare Acquisition Corp. --> LumiraDx Ltd (LMDX)
$ 6.51 | ROT - Rotor Acquisition Corp --> SARCOS CORP. (STRC)
$ 8.28 | AMHC - Amplitude Healthcare Acquisition Corporation --> Jasper Therapeutics (JSPR)
$ 6.21 | FUSE - Fusion Acquisition Corp. --> MoneyLion Inc. (ML)
$ 9.57 | PACE - TPG Pace Tech Opportunities Corp --> Nerdy Inc. (NRDY)
$ 12.50 | DEH - D8 Holdings Corp. --> Vicarious Surgical Inc. (RBOT)
$ 7.92 | ACIC - Atlas Crest Investment Corp --> Archer Aviation (ACRHR)
$ 10.59 | SRNG - Soaring Eagle Acquisition Corp. --> Ginkgo (DNA)

SPAC Vote Calendar

STWO shareholders approved ESS deal on Tuesday with 20.8 million shares (83.1%) redeeming. It closes on October 8th and suffered a massive drop today falling -16% to $7.51. Any shareholders that weren't able to redeem (or chose not to) prior to ex-redemption will not be happy. ITAC shareholders also approved their merger with Arbe Robotics and will begin trading on NASDAQ as ARBE on October 8th as well. 

Oct 12 | $ 9.97 | LOKB - Live Oak Acquisition Corp. II --> Navitas Semiconductor
Oct 13 | $ 9.99 | MRAC - Marquee Raine Acquisition Corp. --> Enjoy Technology, Inc.
Oct 14 | $ 10.00 | VIH - VPC Impact Acquisition Holdings --> BAKKT Holdings, LLC
Oct 14 | $ 10.50 | LEGO - LEGATO MERGER CORP. --> Algoma Steel
Oct 14 | $ 9.98 | HZAC - HORIZON ACQ CP --> Vivid Seats Inc.
Oct 19 | $ 9.98 | BOWX - BowX Acquisition Corp --> WeWork
Oct 19 | $ 10.04 | GSAH - GS Acquisition Holdings Corp II --> Mirion Technologies
Oct 20 | $ 10.07 | SGAM - Seaport Global Acquisition Corp --> Redbox
Oct 20 | $ 10.07 | BCYP - Big Cypress Acquisition Corp. --> SAB Biotherapeutics
Oct 20 | $ 9.96 | KURI - Alkuri Global Acquisition Corp. --> Babylon
Oct 27 | $ 10.12 | TMTS - Spartacus Acquisition Corporation --> NextNav Holdings, LLC

SPAC Stock Movers

Biggest SPAC Gainers

4.79% ~ $ 9.85 | KCAC - Kensington Capital Acquisition Corp. II (Announced)
3.11% ~ $ 9.95 | CORS - Corsair Partnering Corporation (Pre-Deal)
1.85% ~ $ 9.86 | ORIA - Orion Biotech Opportunities Corp. (Pre-Deal)
1.71% ~ $ 10.68 | TPGY - TPG Pace Beneficial Finance Corp (Announced)
1.65% ~ $ 9.83 | GOBI - Gobi Acquisition Corp. (Pre-Deal)
1.30% ~ $ 12.06 | MEKA - MELI Kaszek Pioneer Corp (Pre-Deal)
1.13% ~ $ 9.86 | SNII - Supernova Partners Acquisition Company II, Ltd. (Announced)
1.03% ~ $ 9.79 | FACT - Freedom Acquisition I Corp (Pre-Deal)
.82% ~ $ 9.80 | GPAC - Global Partner Acquisition Corp II (Pre-Deal)
.72% ~ $ 9.78 | LOKM - Live Oak Mobility Acquisition Corp. (Pre-Deal)
.72% ~ $ 9.82 | WPCA - Warburg Pincus Capital Corporation I—A (Pre-Deal)
.71% ~ $ 9.74 | ESM - ESM Acquisition Corporation (Pre-Deal)
.62% ~ $ 9.73 | AFAQ - AF Acquisition Corp. (Pre-Deal)
.62% ~ $ 9.75 | AMCI - AMCI Acquisition Corp. II (Pre-Deal)
.62% ~ $ 9.75 | PSAG - Property Solutions Acquisition Corp. II (Pre-Deal)
.62% ~ $ 9.75 | GFOR - Graf Acquisition Corp. IV (Pre-Deal)
.62% ~ $ 9.77 | DISA - Disruptive Acquisition Corp I (Pre-Deal)
.62% ~ $ 9.77 | FRON - Frontier Acquisition Corp. (Pre-Deal)
.62% ~ $ 9.80 | JUGG - Jaws Juggernaut Acquisition Corporation (Pre-Deal)
.61% ~ $ 9.82 | MSDA - MSD Acquisition Corp. (Pre-Deal)

Biggest SPAC Decliners
-16.00% ~ $ 7.51 | STWO - ACON S2 Acquisition Corp (Announced)
-4.45% ~ $ 8.37 | ITAC - Industrial Tech Acquisitions Inc (Announced)
-3.43% ~ $ 9.84 | DCRD - Decarbonization Plus Acquisition Corp IV (Pre-Deal)
-2.59% ~ $ 9.01 | LSAQ - LIFE SCI ACQ II (Announced)
-2.44% ~ $ 8.78 | SV - Spring Valley Acquisition Corp (Announced)
-2.15% ~ $ 9.77 | VCXA - 10X Capital Venture Acquisition Corp. II (Pre-Deal)
-1.57% ~ $ 11.25 | TDAC - Trident Acquisitions Corp (Announced)
-1.32% ~ $ 9.72 | GNAC - GROUP NINE ACQUISITION CORP. (Pre-Deal)
-1.22% ~ $ 9.73 | POW - Powered Brands (Pre-Deal)
-1.02% ~ $ 9.70 | THCP - Thunder Bridge Capital Partners IV, Inc. (Pre-Deal)
-.88% ~ $ 10.04 | ACBA - Ace Global Business Acquisition Limited (Announced)
-.87% ~ $ 12.57 | FST - FAST ACQ CP (Announced)
-.82% ~ $ 9.72 | SDAC - Sustainable Development Acquisition I Corp. (Pre-Deal)
-.81% ~ $ 9.84 | GSQB - G Squared Ascend II, Inc. (Pre-Deal)
-.77% ~ $ 9.70 | PFTA - PORTAGE FINTECH ACQUISITION CORP. (Pre-Deal)
-.76% ~ $ 10.50 | LEGO - LEGATO MERGER CORP. (Announced)
-.70% ~ $ 9.91 | RONI - Rice Acquisition Corp. II (Pre-Deal)
-.66% ~ $ 9.74 | TBSA - TB SA Acquisition Corp (Pre-Deal)
-.61% ~ $ 9.70 | EQHA - EQ Health Acquisition Corp (Pre-Deal)
-.61% ~ $ 9.71 | TETC - Tech and Energy Transition Corporation (Pre-Deal)

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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report.)

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