The SPAC market continues to stumble along with the vast majority of pre-deal SPACs trading below NAV. This is creating a big opportunity for arbitrage/yield investors. It enables them to scoop up discounted SPACs, get the guaranteed yield with a redemption at $10, and benefit from any upside on stock price jumps. The next wave of the SPAC correction will likely involve this arbitrage being removed as the oversupply and general downward pressure on pre-deal SPACs decreases.
Activity, while slower, is still there though. Three new S-1s yesterday, two deals this morning, and de-SPACs happening. So, while the SPAC market is a long way from "peak SPAC", it isn't moribund.
Thursday Morning Deals
This morning Pioneer Merger (PACX) announced this morning that it is taking Acorns public in a deal valued at $1.6B.
Also this morning, Locust Walk (LWAC) announced it is taking eFFECTOR public in a deal valued at $420M.
IPOE Shareholders Vote Today on SoFi Deal
There is no question that IPOE shareholders will approve the SoFi deal today when they vote. Also, given the current price, any redemptions will be surprising and, frankly, a little bit silly.
Given the heat the SPAC market and Chamath have been taking lately, a successful de-SPAC that performs well both in terms of stock price and execution/financials will be welcome. So, investors will watch this one closely over the next couple of months and certainly when they next report numbers.
Chamath SPACs -- Better than Some Think
Chamath released his annual letter yesterday and it is no surprise that FinTwit has strong opinions that cut both ways.
Overall, and we've said this before, many investors' view of Chamath's SPACs will be heavily influenced by when they bought in. Those that got caught in the irrational FOMO exuberance of peak SPAC a few months ago may have felt some pain during the SPAC correction. For other others that bought in at more reasonable prices, they may have fared better.
Clover Health (CLOV) remains a black eye as questions remain about the quality of the deal and disclosures, but Virgin Galactic (SPCE) has some investors excited again on recent execution news.
That said, SPCE investors that got in at the peak around $60 in February remain significantly underwater. They will also remember Chamath and Richard Branson both selling material amounts of SPCE stock not long ago.
IPOA | 170.0% ~ $ 27.00 | De-SPAC -> Virgin Galactic Holdings, Inc.
IPOB | 57.0% ~ $ 15.70 | De-SPAC -> OpenDoor Labs Inc.
IPOC | -26.7% ~ $ 7.33 | De-SPAC -> Clover Health Investments, Corp.
IPOD | 4.6% ~ $ 10.46
IPOF | 1.2% ~ $ 10.12
SPRQ | -.8% ~ $ 9.92 | Announced -> Sunlight Financial LLC
RAAC | -1.0% ~ $ 9.90 | Announced -> Berkshire Grey
RMGB | -1.0% ~ $ 9.90 | Announced -> ReNew Power Private Limited
TSIA | 2.9% ~ $ 10.29 | Announced -> Latch, Inc.
ACTC | 68.8% ~ $ 16.88 | Announced -> Proterra Inc
SPAC Arbitrage - Better Yield than High Yield Bonds
SPACs have become an incredible opportunity for arbitrage given the significant discounts to NAV and the ability to redeem at a minimum of $10. Credit and arbitrage investors are taking the opportunity to get in and capture this yield while getting a bonus of upside when any good news (e.g. deal announcements, rumors, execution news) pops the stock up.
Here are some of the most deeply discounted SPACs and, from yesterday a list of 200 SPACs under $10.
-3.90% | ITQ - Itiquira Acquisition Corp. (Pre-Deal)
-3.80% | CPTK - Crown PropTech Acquisitions (Pre-Deal)
-3.80% | GXII - GX Acquisition Corp. II (Pre-Deal)
-3.70% | ZWRK - Z-Work Acquisition Corp. (Pre-Deal)
-3.70% | GLHA - Glass Houses Acquisition Corp. (Pre-Deal)
-3.70% | GAMC - Golden Arrow Merger Corp. (Pre-Deal)
-3.70% | PUCK - Goal Acquisitions Corp. (Pre-Deal)
-3.70% | KSIC - Kadem Sustainable Impact Corporation (Pre-Deal)
-3.60% | NBST - Newbury Street Acquisition Corporation (Pre-Deal)
-3.60% | FLME - Flame Acquisition Corp. (Pre-Deal)
-3.60% | MACA - Moringa Acquisition Corp (Pre-Deal)
-3.60% | RCLF - Rosecliff Acquisition Corp I (Pre-Deal)
-3.60% | IGNY - Ignyte Acquisition Corp. (Pre-Deal)
-3.60% | AAQC - Accelerate Acquisition Corp. (Pre-Deal)
-3.50% | SVOK - Seven Oaks Acquisition Corp. (Pre-Deal)
-3.50% | SDAC - Sustainable Development Acquisition I Corp. (Pre-Deal)
-3.50% | TMPM - Turmeric Acquisition Corp (Pre-Deal)
-3.50% | ARBG - Aequi Acquisition Corp (Pre-Deal)
-3.50% | ROCR - ROTH CH ACQUISITION III CO (Pre-Deal)
-3.40% | ADER - 26 Capital Acquisition Corp (Pre-Deal)
-3.40% | EVOJ - Evo Acquisition Corp. (Pre-Deal)
-3.40% | HCCC - Healthcare Capital Corp. (Pre-Deal)
-3.40% | VELO - Velocity Acquisition Corp (Pre-Deal)
-3.40% | NXU - Novus Capital Corporation II (Pre-Deal)
-3.40% | SWET - Athlon Acquisition Corp. (Pre-Deal)
-3.40% | TWNI - Tailwind International Acquisition Corp. (Pre-Deal)
More from Boardroom Alpha
More from Boardroom Alpha For ongoing tracking, analytics, and data on SPACs checkout Boardroom Alpha's SPAC Data and Analytics service.
- SPAC IPOs Mixed, DCRN Deal Slightly Rises, IPOE/SoFi Up Next
- 200 SPACs Under $10
- SPACs Generally Flat, Mergers Rise Slightly
- SPACs Close Down Again on Sleepy Friday
- BRPA Surges 88% on EUA Rumor, SPACs Generally Trickled Lower
- Don't Rush into SPAC IPOs + DPCM Capital (XPOA) taking Jam City Public
- Crypto Crashed Loudly While SPACs Drop Quietly
- SPAC Market is Healthier Than Most Think
- TPGY/EVBox Deal Falling Apart Would be a Big Blow to SPACs
- Will Chamath's IPOE / SoFi Deal be Impacted by Clover's Whiff?
- 15 SPAC Mergers in 30 Days
- SPACs End Week on a High (Kind of)
- Will SPACs Rebound with the Market?
- Pitchforks out for Chamath and SPACs
- Exclusive SPAC Q&A: Better World Acquisition Corp (BWAC)
- SPACs Remain Discounted, Dell prices IPO
- SPAC Deals Lacking Punch + SWBK Taking Bird Public
- SPAC Stocks Continue Slide Despite M&A Activity
(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report.)