Inflation News Hits SPACs, Pershing Square Tontine Surges

The 4% YoY CPI jump dominated market news and sent stocks and SPACs both sliding. Switchback's Bird deal flopped and Ackman boosted PSTH.
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The two deals announced this morning were a mixed bag, though both are still trading at significant discounts to NAV, and certainly lacking punch

- Switchback II Corp (SWBK) + Bird: closed -1.00% to $9.87
- Centricus Acquisition Corp (CENH) + Arqit: closed +2.17% to $9.89

It's very tough to announce a deal in such difficult market conditions, so perhaps we will see CENH trade above NAV as equity markets recover. On a really tough day overall for stocks following this morning's CPI print, SPACs were not immune to the selloff. Current pre-deal SPACs are now trading at an average ~9.84.

Bill Ackman Sends PSTH Surging
It's been awhile since we've heard from Ackman, but his comments at a WSJ panel today caused Pershing Square Tontine Holdings (PSTH), Bill's $4B Mega-SPAC, surging nearly +8% to $24.38 (remember PSTH was priced at $20). Ackman said he was "cautiously optimistic" that a deal he has been working on since November-2020 will come to fruition. 

Perhaps the allure of star-studded SPACs (e.g. Chamath, Klein etc.) is not fully dead given the market's response. Pershing was already trading at a sizable premium relative to the majority of pre-deal SPACs which are trading at a discount to NAV. In addition, high profile deal rumors (see Equinox) - have not necessarily been positive for trading news of late. Yet a small comment from Ackman about the possibility of a deal sent PSTH higher. 

Given that 12 out of 13 deals announced in May are trading under NAV should give investors more pause as they consider diving into PSTH.

Virgin Galactic (SPCE) Plunges
The once darling de-SPAC, Virgin Galactic (SPCE) -- at a point was trading close to $60 -- has been in a downward spiral and is now trading much closer to its SPAC IPO price of $10. Recall, SPCE was the first SPAC transaction for Chamath Palihapitiya and Social Capital Hedosophia and drove much of the early hype around Chamath and SPACs. 

Virgin Galactic shares have been taking a beating

Virgin Galactic shares have been taking a beating

Virgin's demise will add to the increasingly dimming luster for the Chamath line of SPACs, and it certainly doesn't shine well on his > $200M sale of SPCE stock in March for "liquidity" reasons (when shares were trading above $35). 

Biggest SPAC Gainers

7.73% ~ $ 24.38 | PSTH - Pershing Square Tontine Holdings (Pre-Deal)
4.06% ~ $ 26.64 | BRPA - Big Rock Partners Acquisition Corp (Announced)
3.35% ~ $ 11.11 | CMLF - CM Life Sciences Inc (Announced)
2.25% ~ $ 10.43 | WALD - Waldencast Acquisition Corp. (Pre-Deal)
1.95% ~ $ 12.02 | BOWX - BowX Acquisition Corp (Announced)
1.86% ~ $ 9.88 | CENH - Centricus Acquisition Corp. (Announced)
1.73% ~ $ 10.02 | SRSA - Sarissa Capital Acquisition Corp (Pre-Deal)
1.61% ~ $ 10.11 | ROCC - Roth CH Acquisition II Co. (Announced)
1.51% ~ $ 10.10 | HYAC - Haymaker Acquisition Corp. III (Pre-Deal)
1.40% ~ $ 13.08 | LACQ - Leisure Acquisition Corp. (Announced)

Biggest SPAC Decliners

-8.63% ~ $ 13.23 | MUDS - Mudrick Capital Acquisition Corporation II (Announced)
-7.41% ~ $ 11.50 | AGC - ALTIMETER GROWTH CORP (Announced)
-7.07% ~ $ 14.45 | SSPK - Silver Spike Acquisition Corp. (Announced)
-6.03% ~ $ 7.32 | EXPC - Experience Investment Corp (Announced)
-6.00% ~ $ 11.91 | RSVA - Rodgers Silicon Valley Acquisition Corp (Announced)
-5.60% ~ $ 13.15 | TPGY - TPG Pace Beneficial Finance Corp (Announced)
-5.55% ~ $ 10.55 | LCY - Landcadia Holdings III Inc (Announced)
-5.26% ~ $ 10.81 | BCTG - BCTG Acquisition Corp. (Announced)
-5.15% ~ $ 10.68 | FTCV - FinTech Acquisition Corp. V (Announced)
-4.30% ~ $ 17.80 | CCIV - Churchill Capital Corp IV (Announced)
-4.15% ~ $ 14.09 | ACTC - ArcLight Clean Transition 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.)