SPACs at Largest Discount in Months, SPCE Takes Flight

The average Pre-Deal SPAC is trading at just $9.80, which represents a compelling yield+optionality play for would-be investors.
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SPACs spent most of last week in a downward slog as risk assets such as stocks and crypto whipsawed. The silver lining for SPACs? Pre-Deal SPACs are now trading at historic discounts with the average dipping to $9.80, a 20c discount to SPAC NAV. While the seemingly continuous decline in prices, and media coverage, may not be pleasing for investors, it is a reminder that buying discounted SPACs is literally a risk free trade if you can hold to maturity. With patience, buying the right SPAC presents a very compelling yield+optionality trade. 

SPCE Completes First Test Flight, Stock Soars

One of the earliest De-SPACs of the SPAC boom, Virgin Galactic (SPCE), stock is back soaring after it completed its first test flight. SPCE has been much maligned as its chairman, Chamath Palihapitiya, has gone from SPAC darling to the target of short sellers and angry investors who have started to lose money in many of his names. In addition, investors such as Cathie Wood had been putting pressure on SPCE by reducing positions. 

Today's SPCE news is a reminder to not necessarily look at companies as "De-SPACs" and simply focus on them as operating companies that can trade up or down on both performance and news.

SPCE is soaring

SPCE is soaring

Barrage of Merger Votes Coming

Reminder that there are at least 17 SPACs set to vote on their mergers over the next 30 days, upcoming for this week are:

  • Big Rock Partners Acqusition (BRPA) & NeuroRx vote on May 24th
  • Social Capital Hedosophia V (IPOE) & SoFi vote on May 27th
  • Northern Star Acquisition (STIC) & Barkbox vote on May 28th

The votes are a positive sign that the SPAC market continues to clear out, there are over 145 SPACs with announced deals that are waiting to close their deals.

Today, look out for the Big Rock Partners Acquisition (BRPA) merger vote with NeuroRx. The stock has been well over NAV since ex-redemption, but the price action has been volatile thanks to rumors of an emergency use authorization from the FDA. 

SPACs Trading at Large Discounts

-3.80% ~ $ 9.62 | EVOJ - Evo Acquisition Corp. (Pre-Deal)
-3.80% ~ $ 9.62 | RKTA - Rocket Internet Growth Opportunities Corp. (Pre-Deal)
-3.80% ~ $ 9.62 | FLME - Flame Acquisition Corp. (Pre-Deal)
-3.80% ~ $ 9.62 | KSIC - Kadem Sustainable Impact Corporation (Pre-Deal)
-3.80% ~ $ 9.62 | LCA - Landcadia Holdings IV, Inc. (Pre-Deal)
-3.80% ~ $ 9.62 | KAII - Kismet Acquisition Two Corp. (Pre-Deal)
-3.70% ~ $ 9.63 | TCAC - Tuatara Capital Acquisition Corporation (Pre-Deal)
-3.70% ~ $ 9.63 | GAMC - Golden Arrow Merger Corp. (Pre-Deal)
-3.70% ~ $ 9.63 | ISOS - Isos Acquisition Corp. (Pre-Deal)
-3.70% ~ $ 9.63 | SCAQ - Stratim Cloud Acquisition Corp. (Pre-Deal)
-3.70% ~ $ 9.63 | NXU - Novus Capital Corporation II (Pre-Deal)
-3.70% ~ $ 9.63 | OEPW - One Equity Partners Open Water I Corp. (Pre-Deal)

Aging SPACs

$ 10.64 | 24 months | AGBA - AGBA ACQUISITION LIMITED
$ 10.00 | 22 months | THCA - Tuscan Holdings Corp. II
$ 9.93 | 18 months | MCMJ - Merida Merger Corp. I
$ 9.95 | 18 months | CHPM - CHP Merger Corp.
$ 9.85 | 15 months | CCAC - CITIC Capital Acquisition Corp
$ 9.88 | 14 months | DFPH - DFP HEALTHC ACQ
$ 9.85 | 14 months | PLMI - Plum Acquisition Corp. I
$ 9.82 | 11 months | TREB - Trebia Acquisition Corp
$ 9.96 | 11 months | BRLI - Brilliant Acquisition Corporation
$ 10.11 | 11 months | GSAH - GS Acquisition Holdings Corp II
$ 9.74 | 10 months | CPSR - Capstar Special Purpose Acquisition Corp.
$ 9.89 | 10 months | PTK - PTK Acquisition Corp.
$ 9.78 | 10 months | HPX - HPX Corp
$ 25.29 | 10 months | PSTH - Pershing Square Tontine Holdings
$ 9.80 | 10 months | ERES - East Resources Acquisition Company

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