Guidance Slashing is Killing De-SPACs

Marketed on lofty expectations, many new De-SPACs are slashing Guidance. Another EV Charger strikes a deal as EO Charging is going public via FRSG.
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It's been one one of the hot button issues regarding SPAC mania for months now, can any of these SPAC targets meet their lofty projections used to market their deals? We started to see it reemerge last month when ATIP fell on slashed guidance, and the debacle that has been Lordstown Motors. But now it seems as if guidance slashing is on the cusp of almost becoming the norm.

A slew of SPACs in recent weeks, following their first few earnings announcements as public companies, have pulled or lowered their guidance. To name a few:

  • Katapult (KPLT) pulled their guidance that they had reaffirmed as recently as June. The stock has cratered down ~60% over the last few days to a paltry $3.90. 
  • AppHarvest (APPH) slashed its 2021 revenue guidance by ~$17M at the midpoint. But don't fret, they say its 2025 outlook remains on track. APPH is down ~30% on the news. 
  • PlayStudios (MYPS) issued 2021E revenue numbers ~$28M lower than originally expected. MYPS is down ~18% over the last month at $5.75

For more details on the KPLT situation, check out a yet another good piece from Yet Another Value Blog.

It's a troubling sign that so many SPACs are cutting guidance so quickly following their de-SPAC transactions. Inevitably, for several of these companies, they must have known that their original projections were lofty or, even worse, impossible targets to hit. Thus using them to take advantage of potential investors should not sit well.  

Bottom line - it doesn't appear that the carnage with recent de-SPACs will be stopping any time soon. Many of the companies de-spac'ing now were deals struck during peak SPAC and were beneficiaries of the investor euphoria of the moment. Ultimately, many of those investors will get burned while sponsors reap the benefits. 

All that being said - let's not forget several De-SPACs are filing on all cylinders and are either raising guidance and/or performing well: GENI, PLBY, CHPT to name a few.

Votes and De-SPACs

Wednesday's voting results:

  • SRAC --> MNTS on 8/13, reported an additional $35M in redemptions, which the company noted was <20% of its trust
  • NBA --> MIMO on 8/14, did not yet report redemptions

4 more SPACs are set to vote this week:

Aug 12 | $ 9.96 | BLUW - Blue Water Acquisition Corporation --> Clarus Therapeutics
Aug 12 | $ 9.81 | CFAC - CF Finance Acquisition Corp. III --> AEye, Inc.
Aug 12 | $ 9.20 | SAII - SOFTWARE ACQ GP --> Otonomo Technologies, Ltd
Aug 13 | $ 9.60 | NSH - NavSight Holdings, Inc --> Spire Global

SPAC IPOs

Despite sponsors having to make huge concessions to get deals done: upping warrant coverage, ceding a portion of their promote, and overfunding its trust (up to 25c per unit) the IPOs keep coming, and most are still trading down, with a handful of outliers. 

Aug 09 | $ 10.02 | CPAA - Conyers Park III Acquisition Corp.
Aug 09 | $ 10.02 | AHPA - Avista Public Acquisition Corp. II
Aug 09 | $ 10.08 | ASPA - Abri SPAC I, Inc.
Aug 05 | $ 10.09 | NOVV - Nova Vision Acquisition Corp
Aug 05 | $ 9.90 | RVAC - Riverview Acquisition Corp.
Aug 05 | $ 10.03 | ROCG - Roth CH Acquisition IV Co.
Aug 04 | $ 10.45 | BWC - Blue Whale Acquisition Corp I
Aug 04 | $ 10.06 | GLEE - Gladstone Acquisition Corporation
Aug 03 | $ 9.90 | AMCI - AMCI Acquisition Corp. II
Aug 02 | $ 9.94 | HWEL - Healthwell Acquisition Corp. I

SPAC Mergers

SPACs with definitive agreements are largely trading sub NAV: 

Aug 11 | $ 9.84 | EUSG - European Sustainable Growth Acquisition Corp. --> ADS-TEC Energy GmbH
Aug 10 | $ 9.84 | ENVI - Environmental Impact Acquisition Corp. --> Greenlight Biosciences Inc.
Aug 10 | $ 9.83 | ASAX - Astrea Acquisition Corp. --> HotelPlanner
Aug 09 | $ 9.96 | MCMJ - Merida Merger Corp. I --> Leafly Holdings, Inc.
Aug 09 | $ 9.94 | MPAC - Model Performance Acquisition Corp --> MultiMetaVerse Inc.
Aug 06 | $ 9.96 | CMLT - CM Life Sciences III Inc. --> EQRx, Inc.
Aug 05 | $ 9.88 | GCAC - Growth Capital Acquisition Corp. --> Cepton Technologies, Inc
Aug 04 | $ 9.86 | FTAA - FTAC Athena Acquisition Corp. --> Pico
Aug 02 | $ 10.09 | YSAC - Yellowstone Acquisition Co --> Sky Harbour LLC
Aug 02 | $ 9.85 | VPCB - VPC Impact Acquisition Holdings II --> Kredivo

Yet - the deals will surely still be coming. The latest rumor involves IPVF and Aspiration.

This morning saw another EV charging deal as FRSG struck signed a definitive agreement to take EO Charging public at a $675M valuation.

Other EV charging SPACs:

Announced Transaction | $ 9.98 | SNPR - Tortoise Acquisition Corp II -> Volta Industries, Inc.
Announced Transaction | $ 10.89 | TPGY - TPG Pace Beneficial Finance Corp -> EVBox Group
De-SPAC | $ 25.06 | SBE - Switchback Energy Acquisition Corporation -> ChargePoint, Inc.
De-SPAC | $ 10.71 | CLII - Climate Change Crisis Real Impact I Acquisition Corp -> EVgo
De-SPAC | $ 13.12 | NBAC - Newborn Acquisition Corp. -> Nuvve Holding Corp

Wednesday's SPAC Movers

Biggest Gainers

5.77% ~ $ 11.18 | VACQ - Vector Acquisition Corp (Announced)
4.99% ~ $ 11.15 | LEGO - LEGATO MERGER CORP. (Announced)
2.89% ~ $ 10.68 | LEAP - Ribbit LEAP Ltd (Pre-Deal)
2.64% ~ $ 10.09 | NBA - New Beginnings Acquisition Corp (Announced)
2.09% ~ $ 9.79 | CHFW - Consonance-HFW Acquisition Corp (Announced)
1.48% ~ $ 10.26 | XPDI - Power & Digital Infrastructure Acquisition Corp. (Announced)
1.45% ~ $ 9.81 | CFAC - CF Finance Acquisition Corp. III (Announced)
1.23% ~ $ 9.91 | SPGS - Simon Property Group Acquisition Holdings, Inc. (Pre-Deal)
1.03% ~ $ 9.77 | MACC - Mission Advancement Corp. (Pre-Deal)
1.03% ~ $ 9.78 | VII - 7GC & Co. Holdings Inc. (Pre-Deal)
1.02% ~ $ 9.86 | LEGA - Lead Edge Growth Opportunities, Ltd (Pre-Deal)
1.02% ~ $ 9.93 | RMGB - RMG Acquisition Corporation II (Announced)
.93% ~ $ 9.79 | LHAA - Lerer Hippeau Acquisition Corp (Pre-Deal)
.93% ~ $ 9.80 | FRXB - Forest Road Acquisition Corp. II (Pre-Deal)
.92% ~ $ 9.82 | GTPB - GORES TECHNOLOGY PARTNERS II, INC. (Pre-Deal)
.92% ~ $ 9.84 | EUSG - European Sustainable Growth Acquisition Corp. (Announced)
.92% ~ $ 9.89 | PHIC - Population Health Investment Co Inc (Pre-Deal)
.92% ~ $ 9.90 | PFDR - Pathfinder Acquisition Corporation (Announced)

Biggest Losers

-7.35% ~ $ 9.20 | SAII - SOFTWARE ACQ GP (Announced)
-2.95% ~ $ 10.53 | CND - Concord Acquisition Corp (Announced)
-2.86% ~ $ 8.48 | GRNV - GreenVision Acquisition Corp. (Announced)
-2.58% ~ $ 10.20 | SRAC - Stable Road Acquisition Corp. (Announced)
-2.42% ~ $ 10.89 | TPGY - TPG Pace Beneficial Finance Corp (Announced)
-2.39% ~ $ 16.73 | RICE - Rice Acquisition Corp. (Announced)
-1.94% ~ $ 9.60 | NSH - NavSight Holdings, Inc (Announced)
-1.56% ~ $ 12.64 | FWAA - Fifth Wall Acquisition Corp. I (Announced)
-1.22% ~ $ 9.70 | ITHX - ITHAX Acquisition Corp. (Pre-Deal)
-1.22% ~ $ 9.72 | ADF - Aldel Financial Inc. (Pre-Deal)
-1.02% ~ $ 9.69 | MCAE - Mountain Crest Acquisition Corp. III (Pre-Deal)
-1.00% ~ $ 15.84 | SCPE - SC Health Corporation (Announced)
-.91% ~ $ 9.75 | EUCR - Eucrates Biomedical Acquisition Corp (Pre-Deal)
-.85% ~ $ 10.55 | FTCV - FinTech Acquisition Corp. V (Announced)
-.84% ~ $ 10.06 | ARYD - ARYA Sciences Acquisition Corp IV (Pre-Deal)
-.81% ~ $ 9.75 | FVIV - Fortress Value Acquisition Corp. IV (Pre-Deal)
-.72% ~ $ 9.65 | TSPQ - TCW Special Purpose Acquisition Corp (Pre-Deal)
-.72% ~ $ 9.66 | FRSG - First Reserve Sustainable Growth Corp (Pre-Deal)

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