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SPAC Friday Morning Bloodbath

Mudrick and Topps call off merger, PSTH's continued chaos, and Spring Valley postpones shareholder meeting on a rough morning for SPACs.

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Those hoping for a pleasant August Friday morning going into the weekend were hit by blow after blow Friday morning. Several SPACs, high profile ones to boot, dropped big story after big story today. A rundown below. 

MUDS & Topps Call Off their Deal

The Mudrick Capital Acquisition II (MUDS) and Topps combination was once one of the hottest SPAC deals out there. In fact, Topps was was bucking the trend of most SPACs: they had real revenue, an established company, and were raising guidance in the face of SPACs withdrawing and lowering. 

However, that all came to a screeching halt yesterday when the MLB (a 70 year partner of Topps) announced it would not be renewing its license with Topps - instead switching over to the high-flying Fanactics by 2026. In light of this news, Mudrick and Topps "mutually agreed" to part ways. 

MUDS now has slightly over a year to reset and find a new SPAC target. 

SV / AeroFarms Reschedule Meeting

Spring Valley Acquisition Corp (SV) and vertical farming company AeroFarms were due to vote on their business combination today, but the company announced in a press release that they are postponing until 8/30 saying they need more time to satisfy closing conditions. 

See the full press release here.

SV dipped well below $10 as it went ex-redemption this week - so it's safe to wonder if that has something to do with the postponement. 

SV Stock dipped below NAV as it went ex-redemption

SV Stock dipped below NAV as it went ex-redemption

The original deal called for $232M in SPAC trust + a $125M PIPE as part of the merger financing and a $225M minimum cash balance. Did redemptions cause the company to dip below min cash? We will wait and see. 

CAHC Cuts Deal Valuation

LumiraDx and CA Healthcare Acquisition Corp (CAHC) agreed to slash their deal valuation by 40% from ~$5B EV to ~$3B EV, citing market conditions and feedback from shareholders. 

See the full press release here.

CAHC stock slightly up on the news, though still discounted at $9.90. 

Ackman Seeks to Return PSTH Trust

And, lastly, following the announcement of the lawsuit against Pershing Square Tontine Holdings (PSTH) Bill Ackman issued a letter to shareholders last night. 

TLDR: if his SPARC gets approved PSTH will return its $4B in trust to its shareholders, citing the pending lawsuit as an obstacle in getting a deal done in the 11 months PSTH has left.  

PSTH dipped below NAV for its first time ever yesterday and is currently still discounted as of this writing at $19.75. Reminder, PSTH shares were priced at $20 vs. the typical $10. 

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