The media (and investors) that paid most attention during "peak SPAC" continue to drive the SPAC narrative as the remaining air gets let out of the balloon. With the excitement gone for retail, continuing questions around valuations, shareholder/sponsor alignment, and potential SEC involvement... it's clear the SPAC market simply has too much supply.
It will be a grind for the market as it chips away at the backlog of active SPACs (still around 420) as a slow pace of deals and de-SPACs isn't enough to meaningfully outpace the slowly returning IPOs.
So, while painful in many ways, the SPAC market is healthier today than just a few months ago. SPACs are now trading much more rationally given the market dynamics, the SEC will reinforce appropriate structure, deal valuations will become more sane as they hype has been removed, and credit investors are increasingly coming in to take advantage of a compelling yield play.
Wednesday SPAC IPOs
Despite continued underperformance of SPACs as they IPO, and beyond, three more will list today. Expect all three to trade down as investors have seen across the board. So, investors that like the teams and narrative will take their time getting in and allow the price to settle somewhere below NAV which will give them a solid yield + optionality play.
Note that two are downsized and two increased warrant coverage, going from 1/3 to 1/2. Reflecting difficulty in the new issue markets to get deals done.
- SKYA - Skydeck Acquisition Corp. - downsized to $200M; targeting media/TMT
- GIW - GigInternational1, Inc. - $200M; increased warrants to 1/2 (up from 1/3)
- RAM - Aries I Acquisition Corp - downsized to $125M; increased warrants to 1/2 (up from 1/3); targeting AI/Cyber/Crypto
SPAC Bargains are Plentiful and Deep
With the average pre-deal SPAC trading at $9.82 and around 340 trading below $10, there are plenty of opportunities for investors to put SPACs to work for yield plays. Some of the deepest discounts are below.
-4.10% ~ $ 9.59 | MIT - Mason Industrial Technology, Inc. (Pre-Deal)
-4.00% ~ $ 9.60 | VELO - Velocity Acquisition Corp (Pre-Deal)
-3.90% ~ $ 9.61 | CLAS - Class Acceleration Corp. (Pre-Deal)
-3.90% ~ $ 9.61 | JCIC - Jack Creek Investment Corp. (Pre-Deal)
-3.80% ~ $ 9.62 | PUCK - Goal Acquisitions Corp. (Pre-Deal)
-3.80% ~ $ 9.62 | VOSO - Virtuoso Acquisition Corp. (Pre-Deal)
-3.70% ~ $ 9.63 | NBST - Newbury Street Acquisition Corporation (Pre-Deal)
-3.70% ~ $ 9.63 | OEPW - One Equity Partners Open Water I Corp. (Pre-Deal)
-3.70% ~ $ 9.63 | SWET - Athlon Acquisition Corp. (Pre-Deal)
-3.60% ~ $ 9.64 | MSAC - Medicus Sciences Acquisition Corp. (Pre-Deal)
-3.60% ~ $ 9.64 | FTEV - FinTech Evolution Acquisition Group (Pre-Deal)
-3.60% ~ $ 9.64 | KIII - Kismet Acquisition Three Corp. (Pre-Deal)
-3.50% ~ $ 9.65 | ATHN - Athena Technology Acquisition Corp. (Pre-Deal)
-3.50% ~ $ 9.65 | AGAC - African Gold Acquisition Corporation (Pre-Deal)
-3.50% ~ $ 9.65 | GAMC - Golden Arrow Merger Corp. (Pre-Deal)
Tuesday's Biggest Decliners
Given futures are pointing to deep red Wednesday morning it may not be the day investors look to "buy the dip" on SPACs, despite some significant drops on Tuesday. Though some investors with a risk-on approach may see the TPG Pace Beneficial (TPGY) and its EVBox deal looking shaky see Tuesday's -12.5% plunge as an opportunity.
-12.54% ~ $ 12.27 | TPGY - TPG Pace Beneficial Finance Corp (Announced)
-11.19% ~ $ 18.41 | BRPA - Big Rock Partners Acquisition Corp (Announced)
-3.85% ~ $ 10.11 | RACB - Research Alliance Corp. II (Pre-Deal)
-3.69% ~ $ 9.65 | GAMC - Golden Arrow Merger Corp. (Pre-Deal)
-3.58% ~ $ 9.69 | PV - Primavera Capital Acquisition Corporation (Pre-Deal)
-3.36% ~ $ 12.96 | MUDS - Mudrick Capital Acquisition Corporation II (Announced)
-3.00% ~ $ 13.27 | JWS - Jaws Acquisition Corp (Announced)
-2.60% ~ $ 10.50 | BCTG - BCTG Acquisition Corp. (Announced)
-2.32% ~ $ 9.70 | GLBL - Cartesian Growth Corporation (Pre-Deal)
-2.06% ~ $ 12.81 | LACQ - Leisure Acquisition Corp. (Announced)
-2.04% ~ $ 9.75 | HYAC - Haymaker Acquisition Corp. III (Pre-Deal)
-2.04% ~ $ 9.71 | OHPA - Orion Acquisition Corp. (Pre-Deal)
-2.03% ~ $ 9.65 | LCAAU - L Catterton Asia Acquisition Corp (Pre-Deal)
-1.87% ~ $ 9.77 | LIII - Leo Holdings III Corp (Pre-Deal)
-1.62% ~ $ 9.69 | RCLF - Rosecliff Acquisition Corp I (Pre-Deal)
-1.62% ~ $ 9.69 | ANAC - Arctos NorthStar Acquisition Corp. (Pre-Deal)
-1.52% ~ $ 9.74 | CPSR - Capstar Special Purpose Acquisition Corp. (Pre-Deal)
-1.50% ~ $ 9.85 | LDHA - LDH Growth Corp I (Pre-Deal)
-1.42% ~ $ 9.72 | DHBC - DHB Capital Corp. (Pre-Deal)
-1.26% ~ $ 10.18 | VIH - VPC Impact Acquisition Holdings (Announced)
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.
- 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.)