Weekly SPAC Warrant Chronicles

This week was one for the ages, the dark ages, but the ages nonetheless. A brutal bloodbath took over the bulk of our week and showed some weakness that we had not seen since roughly early October. This was not caused by a singular event but rather a series of factors all rolled into the outcome. Some of those factors were the retail pursuit to the “Wall Street Bets” trades. Some was the rising yields. The looming elephant in the room was Churchill Capital IV, (CCIV and CCIV.WS). While the deal did in fact get announced as can be found in our details pages for subscribers, the deal was revealed in a falling market environment and would have resulted in tepid responses on the best of news. The “best news” scenario was not the case and the stock and warrant both plummeted for the course of the following 2 days. The performance of this particular announcement had a rarely discussed psychological threshold. The “daydream effect” if you will. The “daydream” that had inspired so many people to seek their fortune on the Unicorn Rumor of Lucid Motors. Unfortunately many of those newcomers had bought in to the story far too late and the drop from 60-40 was brutal when the expectation was that it would reach the moon (immediately). The cascade that followed was expected, not because of the details of the deal, but the actual psychology of lost expectations and the retirement plan all wrapped into a singular event. I do firmly believe that the run for CCIV is not over at all and will discuss that further as we approach later in the Spring. Maybe sooner as more people discover the absence of large EV targets remaining and a few that have never gotten the positive movement that is associated with the announcement. Lucid does maintain a great advantage going into the merger for Q2 but in my opinion, is joined by several recent deals that will see large upside when the market realizes what they have. SOAC, VCVC, GRSV, FGNA, are also among the undervalued post announcement deals. Lucid Motors will be a powerhouse, of this we have no doubts and are already seeing the strength return to CCIV in the aftermarket on Friday. If that price momentum holds, then we could see a great week. 

For those positioned to take advantage of the subsequent carnage seen in the past week, it was an epic chance to really buy some very attractive warrants at UNBELIEVABLE prices. We also saw positions that required averaging on the lows. While we, along with the entire asset class saw some losses this week; the nature of warrants with little exposure to expiring due to the nature of SPACs will reward us with the whiplash we will see on the return to the upside. Some holdings might have just gotten put on an extra couple week hold just due to the nature of rising and falling markets, but we are very confident with the SPAC portfolio holdings. 

As you can see on the right of this in the table, there were a litany of new S-1 Filings for SPACs (week of Feb 22-26, 2021) and the pace continues. Any discussion about too many or a potential bubble has to be mitigated by very professional teams looking for combinations and the reality that they have had to engage in the discussions with the underwriters and themselves prior to coming to market. The enthusiasm exists in each of their independent niches and while there is good deal of overlap in the pre-eminent industries of the day. There is also a growing focus that expands outside of those hot sectors and holds a wealth of potential. Emerging market environments coupled with warrants are exciting, Artificial Intelligence, Machine Learning, entire transformative events that had not been expected to occur for another decade are upon us. Guess what? TONS of these are found with warrants and we are seeing more and more offerings that are coming to market. Contrary to the discussions of too many, I would argue that the sheer magnitude of the global changes coming will be the drivers for mergers and acquisitions that will be sourced from earlier stages of the VC process. 

How would an earlier stage company benefit us as an investment of this scale? Simply the new paradigm will find many of the later stage and already producing entities with a healthy debt load and aging technology compared to the groups focused on overtaking those in their respective competitive environments. The access to capital markets that is achieved in the reverse merger process can truly take a brilliant, disruptive tech and make it global with the absence of the same debt to accomplish the task and reward shareholders and warrant holders.

While I discuss the favorites and least favorites this week in the Portfolio Review , the Announcements made in the last week are incredibly undervalued as a whole. Each of them with compelling stories, earnings potential and disruptive technology are poised to make a rapid ascent as we approach those Shareholder meetings. 

We will see what the week coming up has in store, but are happy to be done with February and moving on to Spring. The overwhelming number of offerings should serve as a guide to what the insiders think is possible and as we always say, is likely that in the pursuit of 1 merger that the second and third place candidates might offer a very viable return or technology and the due diligence has already been conducted. The expectation is for faster completions of deals which could catch some investors unaware when the target industry of the SPAC is not accurately depicted. Many examples exist where the target acquisition was entirely different than the declared intent and as I scan the large number of healthcare related offerings it makes me wonder if some of those are in fact going to present us with unexpected and great twists that are reminiscent of the Big Rock Partners (BRPA, BRPAW) trade.

Good Luck in the coming days and I will see our subscribers to the SPAC Warrant INDEX next on the Portfolio Review.

 

Mergers announced this week

Trident Acquisition Corp Lottery.com
Fortress Value Acquisition Corp II ATI Physical Therapy
Starboard Value Acquisition Corp Cyxtera
Churchill Capital Corp IV Lucid Motors
NextGen Acquisition Corp xostrucks
Rodgers Silicon Valley Acq Corp Enovix
Northern Star Investment Corp. II Apex Clearing
Gores Holdings V Inc Ardaugh Metal Packaging
One Markforged
Reinvent Technology Partners JOBY Aviation
dMY Technology Group III IonQ
Revolution Acceleration Acquisition Berkshire Grey
RMG Acquisition Corp. II ReNew Power India
Colonnade Aquisition Ouster

This is the S-1 Filings with the SEC on new Blank Check companies or SPACs for the week of Feb. 22-26. 2021

ALL of the following are now available in the Database.

Company Name Date of Filing IPO Value
Build Acquisition Corp. 02/26/2021 $200,000,000
FAST Acquisition Corp. II 02/26/2021 $200,000,000
Avalon Acquisition Inc. 02/26/2021 $200,000,000
RMG Acquisition Corp. VII 02/26/2021 $725,000,000
Tiga Acquisition Corp. II 02/26/2021 $200,000,000
Tiga Acquisition Corp. III 02/26/2021 $300,000,000
StoneBridge Acquisition Corp. 02/26/2021 $200,000,000
RMG Acquisition Corp. V 02/26/2021 $425,000,000
RMG Acquisition Corp. IV 02/26/2021 $275,000,000
Cornerstone Investment Capital Holdings Co. 02/26/2021 $250,000,000
Blueprint Health Merger Corp. 02/26/2021 $200,000,000
BYTE Acquisition Corp. 02/26/2021 $300,000,000
Kadem Sustainable Impact Corp 02/26/2021 $175,000,000
Switchback III Corp 02/26/2021 $275,000,000
TortoiseEcofin Acquisition Corp. III 02/26/2021 $300,000,000
Big Sky Growth Partners, Inc. 02/26/2021 $300,000,000
Orion Biotech Opportunities Corp. 02/25/2021 $200,000,000
AF Acquisition Corp. 02/25/2021 $200,000,000
Jaws Hurricane Acquisition Corp 02/25/2021 $250,000,000
Jaws Wildcat Acquisition Corp 02/25/2021 $250,000,000
VELOCITY MERGER CORP. 02/25/2021 $250,000,000
Sierra Lake Acquisition Corp. 02/25/2021 $300,000,000
INSU ACQUISITION CORP IV 02/24/2021 $220,000,000
Golden Arrow Merger Corp. 02/24/2021 $250,000,000
B. Riley Principal 250 Merger Corp. 02/24/2021 $250,000,000
Tekkorp Digital Acquisition Corp. II 02/24/2021 $150,000,000
Global Consumer Acquisition Corp 02/24/2021 $200000000
FINTECH ACQUISITION CORP VI 02/23/2021 $220,000,000
LEO HOLDINGS IV CORP 02/23/2021 $300,000,000
Bilander Acquisition Corp. 02/23/2021 $150,000,000
Healthwell Acquisition Corp. I 02/23/2021 $250,000,000
Galliot Acquisition Corp. 02/23/2021 $250,000,000
Graf Acquisition Corp. IV 02/23/2021 $300,000,000
Graf Acquisition Corp. III 02/23/2021 $300,000,000
GX Acquisition Corp. II 02/23/2021 $300,000,000
Queen’s Gambit Growth Capital II 02/23/2021 $300,000,000
Acies Acquisition Corp. II 02/22/2021 $250,000,000
Khosla Ventures Acquisition Co. IV 02/22/2021 $200,000,000
Guggenheim Special Purpose Acquisition Corp. I 02/22/2021 $500,000,000
PWP Forward Acquisition Corp. I 02/22/2021 $200,000,000
Waldencast Acquisition Corp. 02/22/2021 $250,000,000
Tio Tech A 02/22/2021 $300,000,000
ESM Acquisition Corp 02/22/2021 $300,000,000
Gores Guggenheim, Inc. 02/22/2021 $750,000,000
New Providence Acquisition Corp. II 02/22/2021 $200,000,000
New Providence Acquisition Corp. III 02/22/2021 $300,000,000

 

In Case you missed them!

Here is the SPAC WARRANT INDEX Broadcast Recap for the past week to catch up

Portfolio Review

Sun – (2-21)

Morning Audios 

Mon – (2-22)
Tue – (2-23)
Wed – (No Broadcast)
Thurs – (2-24)
Fri – (2-25)

Schedule for the coming week. 

Portfolio Review
(Subscriber Content)

Sundays at 6:00PM MST

Morning Audio

(Subscriber Content)

Mon – Friday 6:00AM MST

 

The Science of SPACs

(First installment)

Saturday March 06, 2021

 

 

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