De-SPACs are Falling as PIPE Shares Open Up for Sale

Newly registered PIPE shares are typically free to trade which sometimes leads to a drop in share price as investors take profits or cut losses. Two SPAC IPOs to round out the week.
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Shares of companies that have De-SPAC'ed have been falling upon registration of its PIPE shares. The registration of shares typically allows the PIPE investors to sell their shares if they choose. This is a dynamic we've seen in the past from winners... remember Nikola (NKLA) and QuantumScape (QS)? And even Lucid Motors earlier this week

However, times are different now given where De-SPACs are trading. NKLA was once a SPAC darling trading in the $50s when its PIPE shares registered and subsequently fell, while QS was flying high near $100s when its PIPE shares became effective. Thus, it wasn't necessarily surprising to see big sales and PIPE investors taking large profits

nkla-june2020

Today, the majority of De-SPACs are actually trading at discounts to the typical $10 offering price of PIPEs.* Thus if PIPE investors are eager to sell, they are likely locking in losses on their PIPE investments. Again, highlighting the stark contrast in both sentiment and market activity around SPACs and PIPEs alike. 

Joby Aviation (JOBY) fell nearly -15% today as its $835M of PIPE shares registering today. 

Berkshire Grey (BGRY) dropped -14.5% to $7.58 on its $165M of PIPE shares registering today. 

Hippo (HIPO) shares have been a disaster since going De-SPAC, and took another beating dropping -14.7% yesterday to close at a paltry $4.39 when its $550M PIPE registered

BUT... a drop is not a given. Taboola (TBLA) was on the rise today despite its $135M PIPE shares having gone effective today, however it did close the day down a little over 3%.

The takeaway here? PIPE financing is increasingly hard to come by, and these market dynamics will not help. It will be very difficult for sponsors to syndicate PIPEs given the current state of the world. Look out for more convert-type financing or even cheaper PIPEs down the line. 

*reminder $10 is industry standard, though terms can vary such as Lucid's priced at $15.

Keep a look out for recent De-SPACs for either profit taking or loss cutting

$ 8.41 | CHAQ - Chardan Healthcare Acquisition 2 Corp. --> Renovacor
$ 10.50 | GNPK - Genesis Park Acquisition Corp --> Redwire, LLC
$ 8.80 | SPNV - Supernova Partners Acquisition Company Inc --> Offerpad
$ 10.20 | CMII - CM Life Sciences II Inc. --> SOMALOGIC, INC
$ 8.63 | SPNV - Supernova Partners Acquisition Company Inc --> Offerpad
$ 11.00 | TWCT - TWC Tech Holdings II Corp --> Cellebrite DI Ltd
$ 11.49 | GWAC - Good Works Acquisition Corp --> Cipher Mining Technologies Inc.
$ 16.66 | DFNS - LGL Systems Acquisition Corp --> IronNet Cybersecurity, Inc.
$ 9.35 | AJAX - Ajax I --> Cazoo
$ 8.92 | SNPR - Tortoise Acquisition Corp II --> Volta Industries, Inc.
$ 13.84 | AHAC - Alpha Healthcare Acquisition Corp --> Humacyte, Inc.
$ 8.56 | LWAC - Locust Walk Acquisition Corp. --> EFFECTOR THERAPEUTICS, INC.
$ 14.06 | FWAA - Fifth Wall Acquisition Corp. I --> SMARTRENT.COM, INC.
$ 13.52 | VACQ - Vector Acquisition Corp --> Rocket Lab
$ 8.63 | KSMT - KISMET ACQ ONE --> Nexters Inc
$ 10.35 | RMGB - RMG Acquisition Corporation II --> ReNew Power Private Limited
$ 16.02 | LIVK - LIV Capital Acquisition Corp. --> AgileThought
$ 7.76 | NGAC - NextGen Acquisition Corp --> Xos, Inc.

SPAC IPOs

Get ready for a potential IPO deluge when folks return from Labor Day as we've been noting there has been a ton of S-1/A activity. Two new IPOs started trading today to round out the week of 7 new issues, both featured heavily overfunded trusts and traded up on the day. 

SPAC Merger Votes

Here's a look at what's coming up for vote after the holiday.

Sep 08 | $ 9.99 | SFTW - Osprey Technology Acquisition Corp. --> BlackSky
Sep 09 | $ 15.90 | RICE - Rice Acquisition Corp. --> Aria Energy & Achaea Energy
Sep 10 | $ 9.99 | QELL - Qell Acquisition Corp --> Lilium
Sep 14 | $ 9.98 | SRNG - Soaring Eagle Acquisition Corp. --> Ginkgo
Sep 14 | $ 9.98 | ACIC - Atlas Crest Investment Corp --> Archer Aviation
Sep 14 | $ 9.98 | PACE - TPG Pace Tech Opportunities Corp --> Nerdy Inc.
Sep 15 | $ 9.98 | DEH - D8 Holdings Corp. --> Vicarious Surgical Inc.
Sep 15 | $ 9.98 | ROT - Rotor Acquisition Corp --> SARCOS CORP.
Sep 16 | $ 9.97 | CTAC - Cerberus Telecom Acquisition Corp --> Kore
Sep 22 | $ 10.13 | LATN - Union Acquisition Corp. II --> Procaps Group
Sep 28 | $ 9.95 | PTK - PTK Acquisition Corp. --> Valens Semiconductor
Sep 28 | $ 9.97 | DMYI - dMY Technology Group Inc III --> ionQ, Inc.
Sep 28 | $ 9.95 | MAAC - Montes Archimedes Acquisition Corp --> Roivant Sciences
Sep 28 | $ 9.96 | STPC - Star Peak Corp II --> Benson Hill, Inc.

Today's Price Action

Biggest Gainers

8.77% ~ $ 11.16 | VIH - VPC Impact Acquisition Holdings (Announced)
4.00% ~ $ 10.40 | IPOF - Social Capital Hedosophia Holdings Corp VI (Pre-Deal)
2.93% ~ $ 11.95 | TDAC - Trident Acquisitions Corp (Announced)
2.77% ~ $ 16.34 | RICE - Rice Acquisition Corp. (Announced)
2.50% ~ $ 9.84 | CORS - Corsair Partnering Corporation (Pre-Deal)
2.00% ~ $ 10.20 | IPOD - Social Capital Hedosophia Holdings Corp IV (Pre-Deal)
1.84% ~ $ 9.97 | BTWN - Bridgetown Holdings Ltd (Pre-Deal)
1.57% ~ $ 11.00 | TPGY - TPG Pace Beneficial Finance Corp (Announced)
1.43% ~ $ 9.94 | TRON - CORNER GROWTH ACQUISITION CORP. 2 (Pre-Deal)
1.32% ~ $ 10.00 | FLAC - Frazier Lifesciences Acquisition Corporation (Pre-Deal)
1.32% ~ $ 10.00 | ARYD - ARYA Sciences Acquisition Corp IV (Pre-Deal)
1.24% ~ $ 13.06 | FST - FAST ACQ CP (Announced)
1.14% ~ $ 9.78 | VGII - Virgin Group Acquisition Corp. II (Pre-Deal)
1.11% ~ $ 10.04 | DKDCA - Data Knights Acquisition Corp. (Pre-Deal)
1.04% ~ $ 9.72 | STRE - Supernova Partners Acquisition Company III, Ltd (Pre-Deal)
1.04% ~ $ 9.73 | IGNY - Ignyte Acquisition Corp. (Pre-Deal)
1.02% ~ $ 9.86 | LAAA - Lakeshore Acquisition I Corp. (Pre-Deal)
1.02% ~ $ 9.94 | NGCA - NextGen Acquisition Corp. II (Announced)

Biggest Losers

-2.52% ~ $ 9.88 | RICO - Agrico Acquisition Corp. (Pre-Deal)
-2.33% ~ $ 9.66 | VLAT - Valor Latitude Acquisition Corp. (Pre-Deal)
-1.37% ~ $ 9.72 | GTPB - GORES TECHNOLOGY PARTNERS II, INC. (Pre-Deal)
-.83% ~ $ 9.68 | WPCA - Warburg Pincus Capital Corporation I—A (Pre-Deal)
-.81% ~ $ 9.78 | MCAF - Mountain Crest Acquisition Corp. IV (Pre-Deal)
-.77% ~ $ 9.67 | TLGA - TLG Acquisition One Corp. (Pre-Deal)
-.72% ~ $ 9.67 | GAMC - Golden Arrow Merger Corp. (Pre-Deal)
-.71% ~ $ 9.75 | DNAC - Social Capital Suvretta Holdings Corp. III (Pre-Deal)
-.71% ~ $ 9.83 | CFFE - CF Acquisition Corp. VIII (Pre-Deal)
-.70% ~ $ 9.90 | DDMX - DD3 Acquisition Corp. II (Announced)
-.67% ~ $ 9.66 | NAAC - North Atlantic Acquisition Corporation (Pre-Deal)
-.62% ~ $ 9.62 | KSIC - Kadem Sustainable Impact Corporation (Pre-Deal)
-.62% ~ $ 9.69 | TWNT - Tailwind Two Acquisition Corp. (Pre-Deal)
-.62% ~ $ 9.69 | ARBG - Aequi Acquisition Corp (Pre-Deal)
-.61% ~ $ 9.79 | HSAQ - Health Sciences Acquisitions Corporation 2 (Pre-Deal)
-.61% ~ $ 9.83 | GIW - GigInternational1, Inc. (Pre-Deal)
-.61% ~ $ 9.83 | YAC - Yucaipa Acquisition Corporation (Announced)
-.60% ~ $ 9.98 | SGAM - Seaport Global Acquisition 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.)

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