SPAC Fire Sale

Pre-Deal SPACs are trading near their lowest levels ever, and newly announced deals are mostly underperforming.
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SPACs are trading at fire sale levels. The average pre-deal SPAC can be yours for just $9.74, generally a 26c discount to most SPAC's NAV. In fact, there are only a handful of SPACs that are actually trading at a premium these days, and notably Ackman's PSTH dipped below NAV today - a sign of the times. 

Recent merger announcements also haven't exactly been welcomed with major enthusiasm from investors:

Aug 18 | $ 9.82 | IPVF - InterPrivate III Financial Partners Inc. --> Aspiration Partners
Aug 18 | $ 9.97 | ADF - Aldel Financial Inc. --> Hagerty
Aug 16 | $ 9.80 | SLCR - Silver Crest Acquisition Corporation --> Tim Hortons China
Aug 16 | $ 9.88 | MBAC - M3-Brigade Acquisition II Corp --> Syniverse Corp
Aug 13 | $ 9.82 | MTAC - MedTech Acquisition Corporation --> Memic Innovative Surgery Ltd.
Aug 12 | $ 9.83 | FRSG - First Reserve Sustainable Growth Corp --> EO Charging

Aug 11 | $ 9.83 | EUSG - European Sustainable Growth Acquisition Corp. --> ADS-TEC Energy GmbH 

August slowdown? Negative media coverage? Lawsuits? All are factors for the current depressed levels in SPACs. The question is what will reverse the tide. 

Sponsors are Caving on Economics

The SPAC IPO market has been closed this week - not entirely surprising for the last few weeks of August in the capital markets. However, the market has been challenged for some time and SPAC S-1/As are continuing to paint of picture of what it's taking to get deals priced. 

We've been seeing downsized offerings, raised warrant coverage, and now the gifting of founder shares to so-called "anchor investors." Has to be tough a move for sponsors to give anchor investors, who will likely flip or redeem, a piece of their pie simply to get a deal priced. 

Deal Dynamics

With SPAC trusts getting decimated by redemptions (LIVK reported 93% last night), PIPE financing is becoming as important as ever. A large PIPE, favorably anchored by a well-known respected investor, will be paramount to striking M&A deals in the future. After all, if your deal has no PIPE and 90%+ of the SPAC redeems, what is the point of the SPAC? 

Folks are looking at the Aldel Financial (ADF) / Hagerty as an example of this. Large, well respected State Farm is committing a huge amount of capital ($500-$750M) in addition to financial commitment from the sponsors and CEO. ADF is trading slightly up at $9.97, not exactly a home run reaction from the market, but more time will be needed to assess the success of the deal here. 

SPAC Calendar

Two votes to round out the week and another 7 set for next week. Including MUDS/TOPPS, once a potential de-SPAC darling but lost a big MLB deal today to Fanatics: 

Aug 20 | $ 9.53 | SV - Spring Valley Acquisition Corp --> AeroFarms
Aug 20 | $ 10.01 | VACQ - Vector Acquisition Corp --> Rocket Lab
Aug 23 | $ 11.35 | FWAA - Fifth Wall Acquisition Corp. I --> SMARTRENT.COM, INC.
Aug 24 | $ 9.21 | AHAC - Alpha Healthcare Acquisition Corp --> Humacyte, Inc.
Aug 24 | $ 9.65 | LWAC - Locust Walk Acquisition Corp. --> EFFECTOR THERAPEUTICS, INC.
Aug 25 | $ 9.98 | GWAC - Good Works Acquisition Corp --> Cipher Mining Technologies Inc.
Aug 25 | $ 9.98 | SNPR - Tortoise Acquisition Corp II --> Volta Industries, Inc.
Aug 25 | $ 10.11 | MUDS - Mudrick Capital Acquisition Corporation II --> The Topps Company
Aug 26 | $ 10.00 | DFNS - LGL Systems Acquisition Corp --> IronNet Cybersecurity, Inc.
Aug 27 | $ 9.97 | TWCT - TWC Tech Holdings II Corp --> Cellebrite

Today's Price Action

Biggest Gainers

The day's biggest SPAC gainer was LIV Capital Acquisition Corp (LIVK), which seems counterintuitive as LIVK reported last night that it saw 93% of its SPAC's trust get redeemed on its vote to become Agile Thought. LIVK popped +9.31% today to $10.57 - a similar story to what we saw last week with GRNV/HLBZ. 

9.31% ~ $ 10.57 | LIVK - LIV Capital Acquisition Corp. (Announced)
2.67% ~ $ 10.38 | CND - Concord Acquisition Corp (Announced)
2.56% ~ $ 9.23 | RMGB - RMG Acquisition Corporation II (Announced)
1.82% ~ $ 9.53 | SV - Spring Valley Acquisition Corp (Announced)
1.80% ~ $ 10.20 | XPDI - Power & Digital Infrastructure Acquisition Corp. (Announced)
1.34% ~ $ 9.85 | KSMT - KISMET ACQ ONE (Announced)
1.23% ~ $ 9.87 | NGC - Northern Genesis Acquisition Corp. III (Pre-Deal)
1.13% ~ $ 9.85 | HSAQ - Health Sciences Acquisitions Corporation 2 (Pre-Deal)
.98% ~ $ 9.80 | OCAX - OCA Acquisition Corp (Pre-Deal)
.93% ~ $ 9.72 | TWNI - Tailwind International Acquisition Corp. (Pre-Deal)
.92% ~ $ 9.84 | GGGV - G3 VRM Acquisition Corp. (Pre-Deal)
.82% ~ $ 9.80 | TRON - CORNER GROWTH ACQUISITION CORP. 2 (Pre-Deal)
.72% ~ $ 9.80 | MITA - Coliseum Acquisition Corp. (Pre-Deal)
.71% ~ $ 9.88 | MBAC - M3-Brigade Acquisition II Corp (Announced)
.62% ~ $ 9.69 | ARRW - Arrowroot Acquisition Corp. (Pre-Deal)
.62% ~ $ 9.71 | KAIR - Kairos Acquisition Corp (Pre-Deal)
.62% ~ $ 9.72 | CPAR - Catalyst Partners Acquisition Corp. (Pre-Deal)

Biggest Losers

-7.81% ~ $ 9.21 | AHAC - Alpha Healthcare Acquisition Corp (Announced)
-7.12% ~ $ 7.70 | AJAX - Ajax I (Announced)
-6.75% ~ $ 9.95 | CMII - CM Life Sciences II Inc. (Announced)
-5.82% ~ $ 11.00 | LEGO - LEGATO MERGER CORP. (Announced)
-4.34% ~ $ 14.54 | RICE - Rice Acquisition Corp. (Announced)
-3.81% ~ $ 11.35 | FWAA - Fifth Wall Acquisition Corp. I (Announced)
-3.02% ~ $ 9.65 | LWAC - Locust Walk Acquisition Corp. (Announced)
-2.66% ~ $ 9.65 | ORIA - Orion Biotech Opportunities Corp. (Pre-Deal)
-2.54% ~ $ 9.60 | ITHX - ITHAX Acquisition Corp. (Pre-Deal)
-2.13% ~ $ 10.11 | MUDS - Mudrick Capital Acquisition Corporation II (Announced)
-1.53% ~ $ 9.66 | WALD - Waldencast Acquisition Corp. (Pre-Deal)
-1.42% ~ $ 9.71 | SRSA - Sarissa Capital Acquisition Corp (Pre-Deal)
-1.03% ~ $ 9.62 | ARTA - Artisan Acquisition Corp. (Pre-Deal)
-1.02% ~ $ 9.75 | PHIC - Population Health Investment Co Inc (Pre-Deal)
-.98% ~ $ 10.14 | FTCV - FinTech Acquisition Corp. V (Announced)
-.91% ~ $ 9.78 | FOXW - FoxWayne Enterprises Acquisition Corp. (Pre-Deal)
-.91% ~ $ 9.85 | HLXA - HELIX ACQUISITION CORP (Pre-Deal)
-.89% ~ $ 10.01 | VACQ - Vector Acquisition Corp (Announced)

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