May has one week left to go and not much has changed in SPACs since the month started. After "Peak SPAC" earlier this year the pendulum has swung back from irrational exuberance to one of on-going melancholy for most SPAC investors.
With the excitement of big IPO and deal pops gone, and most SPACs trading at material discounts, it has now become a long-game for yield investors and true believers (looking at you CCIV HODLers). May's SPAC activity has shown IPOs to trade consistently down, deals met with underwhelming investor enthusiasm and a slow grind where there have been just enough IPOs keep the SPAC pool overfilled as deal pace slowed.
The market will pick up again in several months as the SEC makes its stance known on various aspects of SPACs and "peak deal" approaches (more below). For now, investors will look at two big opportunities:
First, investors will take advantage of the yield + optionality play. While many won't see the big upside from that optionality that was happening earlier in the year, there will still be some positives and some home runs (see BRPA below).
Second, investors will increasingly look to short de-SPACs given past performance. They will have plenty to be excited about with 17 de-SPACs coming in the next few weeks and mixed performance for May's de-SPACs .
Read on for a rundown on SPAC IPOs (one today), "Peak Deal", BRPA's surge, and May's de-SPACs.
Another IPO today, as Graf Acquisition IV (GFOR /U) starts trading its $150m SPAC with 1/5 warrant coverage. No specific target mentioned and JP Morgan is running the books. Interestingly Graf II and Graf III remain in the pre-IPO pipeline. Given they are meant to be larger offerings the team may not be ready for them to price.
As we suggested yesterday, investors will likely do well to hold off on buying until the price settles comfortably below NAV. The pattern is set now and it doesn't matter much who the sponsor is, what the target is or if there are particulars to the structure (e.g. adopting Goldman's SOAR structure) -- an IPO will trade down.
Here are May's SPAC IPOs:
May 18 | $ 9.93 | GIW - GigInternational1, Inc.
May 18 | $ 10.00 | SKYA - Skydeck Acquisition Corp.
May 18 | $ 9.97 | RAM - Aries I Acquisition Corp
May 17 | $ 9.97 | CPAR - Catalyst Partners Acquisition Corp.
May 17 | $ 9.87 | POND - Angel Pond Holdings Corp
May 17 | $ 10.01 | MCAE - Mountain Crest Acquisition Corp. III
May 14 | $ 9.95 | ARTA - Artisan Acquisition Corp.
May 14 | $ 9.96 | OSI - Osiris Acquisition Corp.
May 12 | $ 10.05 | ORIA - Orion Biotech Opportunities Corp.
May 07 | $ 10.09 | DKDCA - Data Knights Acquisition Corp.
May 04 | $ 10.00 | MAQC - Maquia Capital Acquisition Corporation
May 03 | $ 9.90 | VLAT - Valor Latitude Acquisition Corp.
"Peak Deal" Watch
We've spoken before about "peak deal" -- a period in the coming months where aging SPACs are under intense pressure to get deals done -- and the pressure is starting to build.
AGBA Acquisition (AGBA), which tops the list of aging SPACs, has an extension in place that gives them until November 2021 (if they so choose). At the vote there were 636,890 shares redeemed for approximately $6.7m and subsequently AGBA added ~$600k to its trust account to extend. Tuscan Holdings Corp. II (THCA) also extended and has until September 2021 and saw $25m worth of redemptions at its vote. Investors should expect to see deal announcements or extensions soon for the next few SPACs in the list below.
$ 10.64 | 24 months | AGBA - AGBA ACQUISITION LIMITED
$ 10.00 | 22 months | THCA - Tuscan Holdings Corp. II
$ 9.92 | 18 months | MCMJ - Merida Merger Corp. I
$ 9.92 | 18 months | CHPM - CHP Merger Corp.
$ 9.85 | 15 months | CCAC - CITIC Capital Acquisition Corp
$ 9.98 | 14 months | DFPH - DFP HEALTHC ACQ
$ 9.85 | 14 months | PLMI - Plum Acquisition Corp. I
$ 9.86 | 11 months | TREB - Trebia Acquisition Corp
$ 9.96 | 11 months | BRLI - Brilliant Acquisition Corporation
$ 10.25 | 11 months | GSAH - GS Acquisition Holdings Corp II
$ 9.73 | 10 months | CPSR - Capstar Special Purpose Acquisition Corp.
$ 9.89 | 10 months | PTK - PTK Acquisition Corp.
$ 9.76 | 10 months | HPX - HPX Corp
$ 25.50 | 10 months | PSTH - Pershing Square Tontine Holdings
$ 9.80 | 10 months | ERES - East Resources Acquisition Company
$ 10.12 | 10 months | GRCY - Greencity Acquisition Corp
$ 9.85 | 10 months | PRPB - CC NEUBERGER PR
$ 9.73 | 10 months | ETAC - E.Merge Technology Acquisition Corp.
$ 9.79 | 9 months | YAC - Yucaipa Acquisition Corporation
$ 10.15 | 9 months | HSAQ - Health Sciences Acquisitions Corporation 2
$ 9.87 | 9 months | GOAC - GO ACQUISITION
$ 9.86 | 9 months | RBAC - RedBall Acquisition Corp.
$ 9.80 | 9 months | LCAP - Lionheart Acquisition Corporation II
$ 9.87 | 9 months | BTAQ - BURGUNDY TC ACQ
ICYMI: Big Rock Partners Surged +88% Thursday
Big Rock Partners (BRPA), which is merging with NeuroRx, rocketed +88% on Thursday on rumors regarding a possible Emergency Use Authorization submission for its COVID-19 therapeutic. As we noted yesterday, BRPA is an interesting SPAC given it IPO'd all the way back in 2017, has had several extension votes and just ~$6M of the original $69M IPO remains in the company's trust.
As of this writing on Friday morning, it is trading down nearly 5% in pre-market as investors take some of their gains.
BRPA's shareholders vote on the deal on Monday, May 24th.
Upcoming Merger Votes
In addition to BRPA's vote on May 24, there are 16 more SPAC merger votes before June is out. Social Finance, which is being taken public by Social Capital Heosophia V (IPOE), reported strong numbers this week.
May 24 | $ 36.08 | BRPA - Big Rock Partners Acquisition Corp --> NeuroRx, Inc.
May 27 | $ 18.40 | IPOE - Social Capital Hedosophia Holdings Corp V --> Social Finance, Inc.
May 28 | $ 9.96 | STIC - Northern Star Acquisition Corp --> Barkbox, Inc.
Jun 02 | $ 13.39 | JWS - Jaws Acquisition Corp --> Cano Health, LLC
Jun 03 | $ 12.95 | JIH - Juniper Industrial Holdings, Inc. --> Janus International Group, LLC
Jun 03 | $ 10.06 | TSIA - TS Innovation Acquisitions Corp --> Latch, Inc.
Jun 04 | $ 12.72 | DFHT - Deerfield Healthcare Technology Acquisitions Corp. --> CareMax Medical Group, LLC
Jun 04 | $ 10.06 | GIX - GigCapital2, Inc. --> Cloudbreak Health, LLC
Jun 07 | $ 12.42 | FSRV - FinServ Acquisition Corp --> Katapult Inc.
Jun 08 | $ 10.15 | ARYA - Arya Sciences Acquisition Corp III --> Nautilus Biotechnology, Inc.
Jun 09 | $ 9.97 | CAPA - HighCape Capital Acquisition Corp --> Quantum-Si
Jun 09 | $ 10.09 | THBR - Thunder Bridge Acquisition II, Ltd --> Indie Semiconductor
Jun 10 | $ 9.97 | VGAC - VG Acquisition Corp --> 23andMe, Inc.
Jun 11 | $ 16.65 | ACTC - ArcLight Clean Transition Corp --> Proterra Inc
Jun 15 | $ 9.99 | FAII - Fortress Value Acquisition Corp. II --> ATI Physical Therapy
Jun 16 | $ 10.09 | CRSA - Crescent Acquisition Corp --> LiveVox TopCo, LLC
Jun 22 | $ 10.43 | TBA - Thoma Bravo Advantage --> ironSource
May has seen 5 de-SPACs so far with mixed performance. Those looking to play the de-SPACs short will have plenty of opportunity over the next 30 days to make their plays. While some investors will try to do this directly on a name-by-name basis, others may take advantage of the new Short De-SPAC ETF (SOGU) ETF from Matthew Tuttle and the Tuttle Capital Management team.
$ 10.41 | ATAC - Altimar Acquisition Corporation --> Blue Owl (OWL)
$ 8.39 | EXPC - Experience Investment Corp --> Blade Urban Air Mobility, Inc. (BLDE)
$ 7.51 | GIK - GigCapital3 Inc --> Lightning eMotors (ZEV)
$ 18.32 | NGA - NORTHERN GN ACQ --> The Lion Electric Company (LEV)
$ 13.80 | VSPR - Vesper Healthcare Acquisition Corp --> The Beauty Health Company (SKIN)
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.
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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report.)