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Only one new merger announcement this week, but oh boy was it a doozy. Digital World Acquisition Corp's (DWAC) "agreement" to take the previously unknown (non-existent?) Trump Media & Technology (TMTG) sent shockwaves throughout Wall Street as retail dove in head first.
After closing up over 350% on the day after announcement, DWAC soared over 100% today settling down from highs after a WILD day of trading.
Leave it to Trump to make people forget that WeWork (WE) is now a public company after completing its merger with BowX Acquisition Corp this week.
We spoke to Tuttle Capital Management CEO Matthew Tuttle about the DWAC phenomena
We think that the publicity stemming from the Trump / DWAC saga might be a net positive for SPACs in that they are bringing some much needed attention back to the asset class. In particular, it has highlighted the asymmetric upside relative to the downside. Why? Investors in DWAC (and other SPACs) have the value of their stock floored at the $10 deal-time redemption value. So, investors that get in below, at, or near $10 face very little risk.
However, anyone who bought above those values -- especially when it was reaching astronomical heights around $175 -- face very significant downside and need to be extremely cautious in their trading.
Don't believe it? Ask some of the CCIV / Lucid investors that saw significant losses as the previous SPAC high water mark dropped precipitously from $60.
On the flipside of the "this might be good for SPACs" argument, is the complete lack of disclosure about ANYTHING related to the deal or the company. So, if something that barely exists can go public via SPAC, then the "SPACs are sketchy" narrative is strongly reinforced.
There are certainly good pre-deal SPACs trading < $10 that offer a significant risk/reward option. However, it's not necessarily prudent to go searching for the next meme stock of all meme stocks. DWAC has far away traded the highest and most volume of any SPAC and far outpaces even the loftiest of EV / flying taxi companies in its ambitions.
Moral of the story? Tread lightly, and look out for more details.
While it's not quite at the level of peak SPAC earlier this year, October has now reached $7.0B in fresh SPAC capital raised in IPO. That is greater than October 2020 and is the highest month since March.
Oct 21 | $ 10.03 | MBSC - M3-Brigade Acquisition III Corp.
Oct 21 | $ 10.05 | GTAC - Global Technology Acquisition Corp. I
Oct 21 | $ 10.11 | ICNC - Iconic Sports Acquisition Corp.
Oct 21 | $ 10.00 | PGSS - Pegasus Digital Mobility Acquisition Corp.
Oct 20 | $ 10.05 | THAC - Thrive Acquisition Corp
Oct 20 | $ 10.03 | XFIN - ExcelFin Acquisition Corp.
Oct 20 | $ 9.97 | NHLD - NewHold Investment Corp. II
Oct 20 | $ 10.09 | GOGN - GoGreen Investments Corp
Oct 20 | $ 10.11 | ENER - Accretion Acquisition Corp.
Oct 19 | $ 10.14 | ACAQ - Athena Consumer Acquisition Corp.
Oct 19 | $ 10.08 | ESAC - ESGEN Acquisition Corp
Oct 19 | $ 10.14 | AXH - Industrial Human Capital, Inc.
Oct 19 | $ 10.10 | ENTF - Enterprise 4.0 Technology Acquisition Corp
Oct 19 | $ 10.09 | NCAC - Newcourt Acquisition Corp
Oct 19 | $ 9.93 | WWAC - Worldwide Webb Acquisition Corp.
Oct 18 | $ 10.20 | FEXD - Fintech Ecosystem Development Corp.
Oct 18 | $ 10.10 | BMAC - Blockchain Moon Acquisition Corp.
Oct 18 | $ 10.10 | SMAP - Sportsmap Tech Acquisition Corp.
Oct 27 | $ 9.98 | MCAD - Mountain Crest Acquisition Corp. II --> Better Therapeutics
Oct 27 | $ 10.11 | GNRS - GREENROSE ACQUISITION CORP --> Shango Holdings, Future Works, Theraplant, TrueHarvest
Oct 27 | $ 10.09 | TMTS - Spartacus Acquisition Corporation --> NextNav Holdings, LLC
Oct 28 | $ 13.94 | TDAC - Trident Acquisitions Corp --> AUTOLOTTO, INC.
Nov 02 | $ 10.05 | KVSB - Khosla Ventures Acquisition Co. II --> Nextdoor, Inc.
Nov 02 | $ 10.00 | SWBK - Switchback II Corporation --> Bird Rides, Inc.
Nov 02 | $ 9.97 | RTPY - Reinvent Technology Partners Y --> Aurora Innovation, Inc.
Nov 02 | $ 9.99 | MOTN - Motion Acquisition Corp --> Ambulnz, Inc.
Today's Price Action
Benessere Capital (BENE) is also headed by DWAC CEO Patrick Orlando. In fact, each of the 4 SPACs Orlando is involved in (DWAC, BENE, ZGYH, and MAQC) all saw elevated action today.
107.03% ~ $ 94.20 | DWAC - Digital World Acquisition Corp. (Announced)
15.64% ~ $ 11.69 | BENE - Benessere Capital Acquisition Corp. (Pre-Deal)
8.74% ~ $ 13.94 | TDAC - Trident Acquisitions Corp (Announced)
5.82% ~ $ 11.64 | XPDI - Power & Digital Infrastructure Acquisition Corp. (Announced)
3.44% ~ $ 10.52 | SEAH - Sports Entertainment Acquisition Corp (Announced)
2.92% ~ $ 10.57 | ZGYH - Yunhong International (Pre-Deal)
2.25% ~ $ 13.10 | MEKA - MELI Kaszek Pioneer Corp (Pre-Deal)
1.22% ~ $ 9.95 | PAFO - Pacifico Acquisition Corp. (Pre-Deal)
1.20% ~ $ 11.00 | AGC - Altimeter Growth Corp. (Announced)
1.18% ~ $ 10.30 | FTCV - FinTech Acquisition Corp. V (Announced)
1.17% ~ $ 10.34 | IPOD - Social Capital Hedosophia Holdings Corp IV (Pre-Deal)
1.01% ~ $ 10.00 | PPHPA - PHP Ventures Acquisition Corp. (Pre-Deal)
.92% ~ $ 9.84 | NVSA - New Vista Acquisition Corp (Pre-Deal)
.91% ~ $ 9.95 | FWAC - Fifth Wall Acquisition Corp. III (Pre-Deal)
.76% ~ $ 9.77 | JUGG - Jaws Juggernaut Acquisition Corporation (Pre-Deal)
.72% ~ $ 9.73 | XPAX - XPAC Acquisition Corp (Pre-Deal)
.72% ~ $ 9.84 | ALCC - AltC Acquisition Corp. (Pre-Deal)
.62% ~ $ 9.75 | GXII - GX Acquisition Corp. II (Pre-Deal)
-.95% ~ $ 10.46 | TPGY - TPG Pace Beneficial Finance Corp (Announced)
-.92% ~ $ 9.71 | APMI - AxonPrime Infrastructure Acquisition Corp (Pre-Deal)
-.89% ~ $ 10.05 | KVSB - Khosla Ventures Acquisition Co. II (Announced)
-.72% ~ $ 9.68 | THCP - Thunder Bridge Capital Partners IV, Inc. (Pre-Deal)
-.56% ~ $ 9.72 | LOKM - Live Oak Mobility Acquisition Corp. (Pre-Deal)
-.51% ~ $ 9.72 | EAC - Edify Acquisition Corp. (Pre-Deal)
-.51% ~ $ 9.73 | LCA - Landcadia Holdings IV, Inc. (Pre-Deal)
-.50% ~ $ 9.99 | FSII - FS Development Corp. II (Announced)
-.41% ~ $ 9.68 | DALS - DA32 Life Science Tech Acquisition Corp. (Pre-Deal)
-.41% ~ $ 9.71 | SKYA - Skydeck Acquisition Corp. (Pre-Deal)
-.41% ~ $ 9.72 | NRAC - Noble Rock Acquisition Corporation (Pre-Deal)
-.41% ~ $ 9.73 | HWEL - Healthwell Acquisition Corp. I (Pre-Deal)
-.41% ~ $ 9.73 | NSTC - Northern Star Investment Corp. III (Pre-Deal)
-.41% ~ $ 9.76 | LDHA - LDH Growth Corp I (Pre-Deal)
-.39% ~ $ 10.09 | TMTS - Spartacus Acquisition Corporation (Announced)
-.39% ~ $ 10.12 | TPGS - TPG Pace Solutions Corp. (Announced)
-.36% ~ $ 9.80 | CCVI - Churchill Capital Corp VI (Pre-Deal)
-.35% ~ $ 9.69 | PTOC - Pine Technology Acquisition Corp. (Pre-Deal)
More from Boardroom Alpha
For ongoing tracking, analytics, and data on SPACs checkout Boardroom Alpha's SPAC Data and Analytics service.
- Podcast: DWAC and Trump / TMTG Make SPACs Great Again
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- Vacasa CEO Matt Roberts on Travel and Merger with TPG Pace Solutions (TPGS)
- Aurora's Chris Urmson and Reinvent's Michael Thompson
- Okapi's Bruce Goldfarb on Activism, the Rise of Retail, AMC, and SPACs
- Scott Wagner and Tom Hegge From True Wind on SPACs
- Podcast: Robinson Capital on Investing in SPACs for Yield
- Matthew Tuttle on FOMO, SPACs, and Capitalizing on Market Trends
- DMYI's Niccolo de Masi on Quantum Computing & IonQ
- Procaps and Union Acquisition II (LATN) Discuss $1.1B SPAC Deal
- Are Niccolo de Masi and dMY the Real SPAC Kings?
- Sarcos Robotics CEO Ben Wolff on Robots and SPACs
- Digital World Acquisition (DWAC) Soars on Trump Deal
- Is IONQ Changing the DeSPAC Narrative? WeWork is Officially Public (almost)
- GS Acquisition (GSAH) / Mirion and BowX (BOWX) / WeWork Set for Merger Votes
- A Positive SPAC Week as HZAC Shareholders Approve Deal. BOWX / WeWork is Next
- Say-On-Pay Failures 2021
- Spring Valley (SV) and AeroFarms end SPAC Merger
- Billy Beane's RedBall Nabs SeatGeek in SPAC Merger
- SPAC Market Remains Saturated, Deal Pace Needs to Pick Up to Clear
- Starry Going Public with FirstMark Horizon (FMAC)
- Don't Go Long on SPACs
- SPAX & SPCX: Two SPAC ETFs for Retail Investors
- No SPACs For You Say the Dems
- Risk Off, Tech Off, SPACs Off
- Podcast: Robinson Capital on Investing in SPACs for Yield
- DMYI Closes and Becomes IONQ. KCAC Drops 16% on Approval
- So Long SPAC Gamma Squeeze? MEKA Rises in IPO Surprise
- All SPAC Analysis from Boardroom Alpha
(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report.)