Two new deals were announced this morning, which felt like a lot of activity relative to what investors have become used to lately. However, neither of those deals, were met with much investor enthusiasm:
- DEH traded up just 0.9% to $10.07
- CHFW traded down 0.3%, and remains below NAV at $9.85
Perhaps it was a little bit of a risk-off sentiment in the market as both of the SPAC targets, Vicarious Surgical + Surrozen, are speculative pre-revenue healthcare plays.
Fear not, this does not mean these deals won't pass or trade up on other company-related news (see dMYD), nor does it mean that all new DA's will trade poorly. Yesterday's winner, BCTG, continued to do well today adding another +6% to $12.84.
QuantumScape Falls on Short Sellers Report
QuantumScape ( (QS) - Get Report) has been one of the most successful de-SPAC investments to date. The stock is trading +300% if you bought shares of the predecessor SPAC, Kensington Acquisition (KCAC), at the IPO price of $10. However, short seller Scorpion Capital released a scathing short report on QS today that sent shares tumbling over 12% to close at $35.85.
One of the points in the 180+ page report is a warning on potential selling pressure in the stock when a portion of insider shares are freed from lockup expiry next week (4/24). Certain insider shares are free to trade 150 days after the merger closed if the stock has maintained a share price of $12 or higher... which it clearly has.
A similar dynamic has happed with QS before. If you recall, QS did have a big price drop in January when shares of its $500M PIPE registered (making them free to trade), which presumably drove many PIPE investors to take a huge profit... the PIPE shares were bought at $10.
Aside from the more qualitative allegations hurled in the report, it's worth keeping an eye on this technical dynamic next week, the stock is trading at a huge premium to $10 and early investors and the sponsor stand to make a nice profit if they sell.
Going forward, SPAC investors should expect to see more regularly occurring short seller reports coming post de-SPAC as these newly minted public companies are setting up to be rich targets based on aggressive financial forecasts and technology promises.
Deal Rumor: D & Z Media Acquisition / Simplifi
Bloomberg reports that D & Z Media Acquisition (DNZ) is in talks to merge with online advertising company Simplifi. DNZ, co-sponsored by ICE, raised $287.5M in its SPAC IPO back in January. CEO Betty Liu is an experienced media executive and former Vice Chair of the NYSE.
DNZ's prospectus stated that the company intended to seek a target "related to media, education technology (“ed”), and other related industries." Reports are saying the deal could be valued ~$1.5B. DNZ traded up slightly 0.6% on the day, but is still sub-nav at $9.96.
Biggest SPAC Gainers
6.12% ~ $ 12.84 | BCTG - BCTG Acquisition Corp. (Announced)
5.73% ~ $ 12.36 | PSAC - Property Solutions Acquisition Corp (Announced)
5.70% ~ $ 13.16 | BOWX - BowX Acquisition Corp (Announced)]
4.98% ~ $ 13.90 | MUDS - Mudrick Capital Acquisition Corporation II (Announced)
4.84% ~ $ 9.97 | VHAQ - Viveon Health Acquisition Corp. (Pre-Deal)
2.78% ~ $ 11.46 | APXT - Apex Technology Acquisition Corporation (Announced)
1.65% ~ $ 10.48 | SVFB - SVF Investment Corp. 2 (Pre-Deal)
1.55% ~ $ 12.76 | FST - FAST ACQ CP (Announced)
1.54% ~ $ 9.90 | NRAC - Noble Rock Acquisition Corporation (Pre-Deal)
1.51% ~ $ 10.10 | PHIC - Population Health Investment Co Inc (Pre-Deal)
Biggest SPAC Losers
-7.96% ~ $ 10.06 | NBST - Newbury Street Acquisition Corporation (Pre-Deal)
-7.41% ~ $ 20.12 | CCIV - Churchill Capital Corp IV (Announced)
-6.85% ~ $ 12.37 | VIH - VPC Impact Acquisition Holdings (Announced)
-6.40% ~ $ 10.83 | THCB - Tuscan Holdings Corp. (Announced)
-6.18% ~ $ 13.51 | AGC - ALTIMETER GROWTH CORP (Announced)
-6.00% ~ $ 18.02 | SSPK - Silver Spike Acquisition Corp. (Announced)
-4.69% ~ $ 12.18 | TDAC - Trident Acquisitions Corp (Announced)
-4.68% ~ $ 10.19 | SPFR - Jaws Spitfire Acquisition Corporation (Announced)
-4.51% ~ $ 15.45 | NGA - NORTHERN GN ACQ (Announced)
-3.97% ~ $ 10.15 | HOL - Holicity Inc (Announced)
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