A Big Week for SPACs. Will the Narrative Continue to Improve?

With 2021's de-SPACs performing well and the market trading more rationally, SPAC investors will have a lot of hope as June progresses.
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While most pre-deal SPACs continue to trade below NAV, the narrative may be changing on SPACs yet again. In particular investors are starting to realize that de-SPAC performance in 2021 has been unjustly and negatively impacted by the come down from peak SPAC in February/March.  The reality is that nearly 80% of deals are above $10 and many are significantly higher. For many investors that got into the SPACs early, around $10, they will have been handsomely rewarded. 

This week, and the rest of the month, the SPAC market will continue to push on this narrative with another 20 deals to be voted on by shareholders -- with 7 SPACs deals being voted on this week alone.

This Week's Votes
Jun 07 | $ 13.81 | FSRV - FinServ Acquisition Corp --> Katapult Inc.Jun 08 | $ 10.12 | ARYA - Arya Sciences Acquisition Corp III --> Nautilus 
Jun 09 | $ 10.09 | THBR - Thunder Bridge Acquisition II, Ltd --> Indie Semiconductor
Jun 09 | $ 9.99 | CAPA - HighCape Capital Acquisition Corp --> Quantum-Si
Biotechnology, Inc.
Jun 10 | $ 17.20 | SSPK - Silver Spike Acquisition Corp. --> WM Holding Company, LLC
Jun 10 | $ 10.08 | CCX - Churchill Capital Corp II --> Software Luxembourg Holding S.A
Jun 10 | $ 10.00 | VGAC - VG Acquisition Corp --> 23andMe, Inc.
Jun 11 | $ 18.96 | ACTC - ArcLight Clean Transition Corp --> Proterra Inc

Also pushing the narrative forward was Chamath Palihapitiya as the SOFI deal closed, and trade well, and then investors saw he filed for 4 new SPAC S-1s in the aftermarket last Wednesday. 

Also last week, in a potential twist to the narrative, Bill Ackman looked to rewrite the SPAC "merger." 

SPACs are Rational Again
We've said this before, but it is worth repeating. The SPAC market today is much healthier and trading much more rationally than late 2020 / early 2021. 

Considering the oversupply of SPACs looking for deals and the fact that there is little reason they should ever trade much above NAV, the fact that they are mostly below NAV makes sense. This then gives investors an opportunity to go for yield + upside by carefully selecting a robust basket. Investors should still be looking critically at the SPACs they add to the basket -- good teams, sponsors, underwriters, structures -- but there are plenty of opportunities.

SPAC Amendments
We continue to see some SPACs that are prepping IPOs upping warrant coverage (and downsizing) in order to help deals get priced. It will be important to watch what SPACs and Sponsors have to do to drive interest in new SPACs considering the current oversupply.

  • CNTQ/U ups warrant cov to 1/2
  • ACRO/U ups warrant cov to 1/3
  • GWII/U ups warrant cov to 1/2
  • GPCO/U ups to full warrant

VPC Impact Acquisition Holdings III (VPCC) announced Deal with Dave
In a deal valued at $3.6B (4.9x 2022E revenue) VPCC is taking Dave, a Leading Banking App with 10 Million Customers, public. The PIPE is at $210M with Tiger, Wellington, and Corbin all participating. VPCC closed Friday at $9.89 and is up slightly this morning the news. 

SPAC Opportunities

SPACs at the Largest Discount
-4.00% | GGMC - Glenfarne Merger Corp. (Pre-Deal)
-3.80% | BGSX - Build Acquisition Corp. (Pre-Deal)
-3.80% | GLHA - Glass Houses Acquisition Corp. (Pre-Deal)
-3.75% | ITQ - Itiquira Acquisition Corp. (Pre-Deal)
-3.70% | NRAC - Noble Rock Acquisition Corporation (Pre-Deal)
-3.70% | HCCC - Healthcare Capital Corp. (Pre-Deal)
-3.70% | NBST - Newbury Street Acquisition Corporation (Pre-Deal)
-3.70% | BITE - Bite Acquisition Corp. (Pre-Deal)
-3.70% | VELO - Velocity Acquisition Corp (Pre-Deal)
-3.70% | BYTS - BYTE Acquisition Corp. (Pre-Deal)
-3.70% | ITHX - ITHAX Acquisition Corp. (Pre-Deal)
-3.60% | KSIC - Kadem Sustainable Impact Corporation (Pre-Deal)
-3.60% | BIOT - Biotech Acquisition Company (Pre-Deal)
-3.60% | DHCA - DHC Acquisition Corp (Pre-Deal)
-3.60% | OEPW - One Equity Partners Open Water I Corp. (Pre-Deal)
-3.60% | RCLF - Rosecliff Acquisition Corp I (Pre-Deal)
-3.60% | ASAX - Astrea Acquisition Corp. (Pre-Deal)
-3.55% | JCIC - Jack Creek Investment Corp. (Pre-Deal)
-3.50% | GAMC - Golden Arrow Merger Corp. (Pre-Deal)
-3.50% | GXII - GX Acquisition Corp. II (Pre-Deal)

Buy the Dip? Friday's Biggest Decliners
-11.94% ~ $ 22.06 | PSTH - Pershing Square Tontine Holdings (Announced)
-3.84% ~ $ 11.27 | SRAC - Stable Road Acquisition Corp. (Announced)
-3.33% ~ $ 13.05 | TPGY - TPG Pace Beneficial Finance Corp (Announced)
-3.30% ~ $ 9.67 | FRWA - PWP Forward Acquisition Corp. I (Pre-Deal)
-2.82% ~ $ 10.00 | RACB - Research Alliance Corp. II (Pre-Deal)
-1.49% ~ $ 9.26 | GIX - GigCapital2, Inc. (Announced)
-1.45% ~ $ 10.20 | ARYD - ARYA Sciences Acquisition Corp IV (Pre-Deal)
-1.44% ~ $ 10.28 | AGCB - Altimeter Growth Corp. 2 (Pre-Deal)
-1.42% ~ $ 13.21 | JIH - Juniper Industrial Holdings, Inc. (Announced)
-1.38% ~ $ 10.00 | PACE - TPG Pace Tech Opportunities Corp (Announced)
-1.32% ~ $ 14.92 | DFHT - Deerfield Healthcare Technology Acquisitions Corp. (Announced)
-1.28% ~ $ 9.99 | CAPA - HighCape Capital Acquisition Corp (Announced)
-1.25% ~ $ 12.63 | FST - FAST ACQ CP (Announced)
-1.23% ~ $ 9.67 | NAAC - North Atlantic Acquisition Corporation (Pre-Deal)
-1.22% ~ $ 9.73 | SSAA - Science Strategic Acquisition Corp. Alpha (Pre-Deal)
-1.17% ~ $ 10.14 | FTOC - FTAC Olympus Acquisition Corp (Announced)
-1.12% ~ $ 9.75 | SPKB - Silver Spike Acquisition Corp II (Pre-Deal)
-1.04% ~ $ 9.63 | VELO - Velocity Acquisition Corp (Pre-Deal)
-1.02% ~ $ 9.67 | PPGH - Poema Global Holdings Corp. (Pre-Deal)
-1.02% ~ $ 9.67 | PDOT - Peridot Acquisition Corp. II (Pre-Deal)

Deal Watch - Aging SPACs that Need a Deal
SPACs typically have 24 months to find and complete a deal. Here are pre-deal SPACs that are getting older and will need to start to find deals sooner rather than later. And, remember, "Peak Deal" is coming and with so many SPACs looking for deals we could see fierce competition and looser terms.

$ 9.98 | 19 months | MCMJ - Merida Merger Corp. I
$ 9.98 | 19 months | CHPM - CHP Merger Corp.
$ 9.93 | 16 months | CCAC - CITIC Capital Acquisition Corp
$ 10.11 | 15 months | DFPH - DFP HEALTHC ACQ
$ 9.71 | 15 months | PLMI - Plum Acquisition Corp. I
$ 9.88 | 12 months | TREB - Trebia Acquisition Corp
$ 10.00 | 12 months | BRLI - Brilliant Acquisition Corporation
$ 10.38 | 12 months | GSAH - GS Acquisition Holdings Corp II
$ 9.80 | 11 months | CPSR - Capstar Special Purpose Acquisition Corp.
$ 9.76 | 11 months | HPX - HPX Corp
$ 9.80 | 11 months | ERES - East Resources Acquisition Company
$ 10.13 | 11 months | GRCY - Greencity Acquisition Corp
$ 9.84 | 11 months | PRPB - CC NEUBERGER PR
$ 9.76 | 11 months | ETAC - E.Merge Technology Acquisition Corp.

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