Chamath's IPOE Shareholders Vote Today on SoFi Merger; Acorns and eFFECTOR Deals

Chamath Palihapitiya released his annual letter yesterday as IPOE shareholders vote today on the SoFile merger. Pioneer Merger (PACX) and Locust Walk (LWAC) announce deals for Acorns and eFFECTOR.
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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.

IPOE has traded well since the deal announcement and isn't (too) far off it's highs from peak SPAC

IPOE has traded well since the deal announcement and isn't (too) far off it's highs from peak SPAC

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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.

SPCE investors that got in during peak SPAC will still be unhappy despite recent upswing

SPCE investors that got in during peak SPAC will still be unhappy despite recent upswing

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.

De-SPACs
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.

Pre-deal SPACs
IPOD | 4.6% ~ $ 10.46
IPOF | 1.2% ~ $ 10.12

SPAC Pipes
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)

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