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SPAC Market Off Track

With only 1 new deal announced in the first two trading weeks of 2022 the SPAC market is off track. Sky high redemptions, more IPOs, big price drops on deSPAC, and an oversupply of SPACs has the whole market at risk.

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Gores Metropoloulos II (GMII) shareholders went to vote today on their deal with Sonder. As usual, the vote will pass and the key question will be the redemption numbers. If the redemption numbers are bad, don't expect to get those details until next week at best. 

ICYMI: Read our report on the deal and listen to the podcast here

Gores, to date, has a great track record of almost zero redemptions across all of the SPACs it has done. So the results will be important for the deal itself and as a bellwether for the broader SPAC market. If it can somehow replicate prior low redemption performance it could be a bit of a boost to the market. 

SPAC redemptions are out of control and could signal massive problems ahead

SPAC redemptions are out of control and could signal massive problems ahead

Benessere Capital Acquisition Corp (BENE), Patrick Orlando's (of DWAC fame) SPAC that is merging with eCombustible, announced approximately 10% of shareholders redeemed (~$11.2M) at its extension vote. It also added $0.20 per share to the trust. As we flagged when the deal extension was first announced, it now has until July 2022 to complete its deal.

Still only the 1 deal announced in 2022 and 13 new SPAC IPOs (>$3B). 

That's bad. Period. We won't rehash this today -- you can go back and read any of our recent daily updates -- but the current state of the SPAC market isn't sustainable. Someone will have to put the breaks on -- maybe Gary G and the SEC to the rescue?

New SPAC issuance needs to take a hiatus

New SPAC issuance needs to take a hiatus

Of course, the risk of Gary G and the SEC stepping in is that they over-regulate and the market "breaks" in a different way.

In the meantime, and as we've noted before, SPACs remain a money maker for the sponsors, underwriters, and yield-focused investors. Some institutional and (fewer) retail "traders", not "investors", are making money on the volatility, "rug pulls", gamma squeezes, etc., but it isn't broad and it isn't consistent. Regardless, all these players who can, and should, be making money off of a healthy SPAC market face an uncertain future until the market can get back into balance.

We'll leave you with the latest SPAC rumor (again broken by the great Gillian Tan @ Bloomberg). Not surprisingly given the SPAC market's condition, initial reactions on FinTwit are not positive:

SPAC Calendar

Jan 19 | $ 10.03 | XPDI - Power & Digital Infrastructure Acquisition Corp. --> Core Scientific, Inc.
Jan 19 | $ 8.63 | VMAC - Vistas Media Acquisition Company Inc. --> Anghami
Jan 20 | $ 8.97 | TREB - Trebia Acquisition Corp --> System1
Jan 25 | $ 10.18 | YSAC - Yellowstone Acquisition Co --> Sky Harbour LLC
Jan 26 | $ 9.97 | SEAH - Sports Entertainment Acquisition Corp --> Super Group
Jan 31 | $ 9.93 | ENNV - ECP Environmental Growth Opportunities Corp. --> Fast Radius, Inc.
Jan 31 | $ 10.04 | CCAC - CITIC Capital Acquisition Corp --> Quanergy Systems
Feb 01 | $ 9.97 | OCA - Omnichannel Acquisition Corp --> Kin
Feb 01 | $ 9.96 | ENVI - Environmental Impact Acquisition Corp. --> Greenlight Biosciences Inc.
Feb 01 | $ 9.96 | IVAN - Ivanhoe Capital Acquisition Corp --> SES Holdings
Feb 03 | $ 9.98 | SBEA - SilverBox Engaged Merger Corp I --> Black Rifle Coffee Company
Feb 09 | $ 9.96 | MBAC - M3-Brigade Acquisition II Corp --> Syniverse Corp

SPAC Stock Movers

Biggest SPAC Gainers
5.03% ~ $ 10.03 | XPDI - Power & Digital Infrastructure Acquisition Corp. (Announced)
4.84% ~ $ 70.88 | DWAC - Digital World Acquisition Corp. (Announced)
3.34% ~ $ 10.20 | VMGA - VMG Consumer Acquisition Corp. (Pre-Deal)
1.97% ~ $ 9.82 | GOBI - Gobi Acquisition Corp. (Pre-Deal)
1.53% ~ $ 9.95 | BLSA - BCLS Acquisition Corp. (Pre-Deal)
1.01% ~ $ 10.00 | NETC - Nabors Energy Transition Corp. (Pre-Deal)
.81% ~ $ 9.91 | NFNT - Infinite Acquisition Corp. (Pre-Deal)
.78% ~ $ 15.54 | ESSC - East Stone Acquisition Corporation (Announced)
.71% ~ $ 9.87 | MSDA - MSD Acquisition Corp. (Pre-Deal)
.59% ~ $ 10.18 | GDNR - Gardiner Healthcare Acquisitions Corp. (Pre-Deal)
.52% ~ $ 9.73 | APMI - AxonPrime Infrastructure Acquisition Corp (Pre-Deal)
.51% ~ $ 9.86 | NPAB - New Providence Acquisition Corp. II (Pre-Deal)
.51% ~ $ 9.90 | CBRG - Chain Bridge I (Pre-Deal)
.41% ~ $ 9.76 | POND - Angel Pond Holdings Corp (Pre-Deal)
.41% ~ $ 9.76 | GFOR - Graf Acquisition Corp. IV (Pre-Deal)
.40% ~ $ 9.92 | AURC - Aurora Acquisition Corp. (Announced)
.39% ~ $ 10.25 | BRLI - Brilliant Acquisition Corporation (Pre-Deal)
.34% ~ $ 11.78 | ALAC - Alberton Acquisition Corporation (Announced)
.32% ~ $ 9.74 | CFV - CF Acquisition Corp. V (Announced)
.31% ~ $ 9.73 | HPLT - Home Plate Acquisition Corp (Pre-Deal)

Biggest SPAC Losers
-10.12% ~ $ 8.97 | TREB - Trebia Acquisition Corp (Announced)
-10.06% ~ $ 8.63 | VMAC - Vistas Media Acquisition Company Inc. (Announced)
-4.29% ~ $ 8.48 | GMII - Gores Metropoulos II, Inc. (Announced)
-3.70% ~ $ 9.90 | FEXD - Fintech Ecosystem Development Corp. (Pre-Deal)
-1.44% ~ $ 10.25 | HUGS - USHG Acquisition Corp. (Announced)
-1.29% ~ $ 9.91 | ALOR - ALSP Orchid Acquisition Corp I (Pre-Deal)
-1.02% ~ $ 9.70 | MTAL - Metals Acquisition Corp (Pre-Deal)
-1.02% ~ $ 9.71 | RACB - Research Alliance Corp. II (Pre-Deal)
-.91% ~ $ 9.79 | ROCL - Roth CH Acquisition V Co. (Pre-Deal)
-.82% ~ $ 9.67 | LOCC - Live Oak Crestview Climate Acquisition Corp. (Pre-Deal)
-.78% ~ $ 11.42 | GGPI - Gores Guggenheim, Inc (Announced)
-.71% ~ $ 9.73 | AKIC - Sports Ventures Acquisition Corp. (Pre-Deal)
-.71% ~ $ 9.73 | OHAA - Opy Acquisition Corp. I (Pre-Deal)
-.60% ~ $ 9.90 | LVAC - LAVA Medtech Acquisition Corp. (Pre-Deal)
-.60% ~ $ 9.98 | SBEA - SilverBox Engaged Merger Corp I (Announced)
-.59% ~ $ 9.71 | CPAR - Catalyst Partners Acquisition Corp. (Pre-Deal)
-.59% ~ $ 9.79 | BMAQ - Blockchain Moon Acquisition Corp. (Pre-Deal)
-.58% ~ $ 9.75 | LVRA - Levere Holdings Corp (Pre-Deal)
-.57% ~ $ 9.74 | KLAQ - KL Acquisition Corp (Pre-Deal)
-.51% ~ $ 9.70 | GNAC - GROUP NINE ACQUISITION CORP. (Pre-Deal)

More from Boardroom Alpha

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Monthly SPAC Market Review

Exec Moves (all issues)

The Know Who Drives Return Podcast (all episodes)

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