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May 1, 2023
Relative Performance
We've been writing about the challenging environment for SPACs for almost two years.
  • Nearly all deals are climbing uphill.
  • The market is still waiting on regulatory clarity from the SEC, 13 months after the regulatory agency's initial draft of rule changes threw a wet blanket over deal activity in Q1 of last year.

Speculative growth and technology names have traded weakly for months.
  • The Fed's hawkish pivot early last year changed the market's outlook on unprofitable businesses.
  • There's still an entourage of haters that love to disparage the SPAC program, in part because the bumper crop of SPACs from 2020 and 2021 acquired a huge number of growth and tech companies.

This piece in the Wall Street Journal last week highlighted the weak performance of deSPACs between 2020 and 2022. The graphic below shows the current stock price of over 300 deSPACs from that time period. Nearly a third of those deSPACs have fallen below $1.
Source: Wall Street Journal
But the article is missing a crucial piece of context. SPACs are an IPO alternative -- so what kind of performance have traditional IPOs seen over the same time frame?

We measured the return from offer price for all IPOs over the same time period. Since regular IPOs don't all price at $10, we benchmarked performance to a percentage return for easier visibility.
Out of more than 700 regular IPOs since 2020, greater than one-third have fallen in price by 80% or more.
  • The shape of the chart above looks strikingly similar to the Wall Street Journal's chart for SPAC IPOs.

A more detailed study might use some method to weight performance by deal size.
  • Low-float deSPACs and miniscule IPOs are large contributors to the overall results

We've lived through a changing of the guard in the past year or so.
  • COVID-era IPOs and deSPACs shared many themes and characteristics.
  • Their performance has been roughly commensurate with each other.

The SEC's method of governance feels reminiscent of the way the agency has cast a shadow over cryptocurrency without enacting actual rules of engagement. We remain hopeful that regulatory clarity will make activity easier for those that remain active in the SPAC ecosystem.
News From the Past Week

Deal News

  • Rice Acquisition Corp. II (RONI) secured an additional $275mm in PIPE financing for its deal with NET Power.
  • Arrowroot Acquisition Corp. (ARRW) announced a deal to acquire iLearningEngine, a developer of a cloud-based learning-as-a-service platform designed to help enterprises to deliver firm-specific training. The deal reflects an enterprise value of $1.4bn. No closing timeline was given.

  • Altitude Acquisition Corp. (ALTU) announced a deal to acquire Picard Medical, the parent company of SynCardia Systems, LLC, a mechanical heart replacement technology company. The deal reflects a pre-money enterprise value of $480mm and is expected to close in 2H 2023.

  • Investcorp Europe Acquisition Corp I (IVCB) announced a deal to acquire OpSec Group, a brand protection solutions and IP management company. The deal reflects an enterprise value of $426mm and is expected to close in 2H 2023.

  • Healthwell Acquisition Corp. I (HWEL) announced a deal to acquire Starton Therapeutics, a clinical-stage biotechnology company focused on transforming standard-of-care therapies with proprietary continuous delivery technology. The deal reflects an enterprise value of $339mm and is expected to close in 2H 2023.

  • Evo Acquisition Corp. (EVOJ) and 20Cube Logistics agreed to terminate their business combination.

  • Swiftmerge Acquisition Corp. (IVCP) signed an LOI with HDL Therapeutics Inc., a commercial-stage biotech company with an FDA-approved cardiovascular therapy for reducing coronary atheroma in homozygous familial hypercholesterolemia patients. A definitive agreement is expected in Q2 2023.

  • LAMF Global Ventures Corp. I (LGVC) signed an LOI with Nuvo Group Ltd., the creators of INVU by Nuvo™, an FDA-cleared remote pregnancy monitoring platform, at a pre-money equity valuation of $269mm.

  • Roth CH Acquisition V Co. (ROCL) signed an LOI with Slacker, a wholly-owned subsidiary of LiveOne (NASDAQ: LVO), a music, entertainment, and technology platform, at a pre-money valuation of $160mm.

  • Chain Bridge I (CBRG) signed an LOI with an unspecified target company. No additional information was given.

  • Project Energy Reimagined Acquisition Corp. (PEGR) signed an LOI with an unspecified target company, pushing its liquidation deadline back by three months to 8/2/2023.


Deal Closings & Approvals

  • CIIG Capital Partners II, Inc. (CIIG) closed its acquisition of Zapp Electric Vehicles on Friday 4/28/2023. Redemption statistics were not provided. Ordinary shares and warrants are expected to trade on the NASDAQ as “ZAPP” and “ZAPPW” beginning Monday 5/1/2023.
IPOs
There were no SPAC IPOs last week.

New S-1's
There were no new S-1's last week.

Liquidations
Name Ticker Size ($mm) Announced Liq. Date Trust Per Share
Blockchain Moon BMAQ 115 4/24/2023 4/25/2023 $10.49
NewHold II NHIC 195 4/25/2023 4/26/2023 $10.28
Intelligent Medicine IQMD 207 4/26/2023 4/27/2023 TBD
Anthemis Digital I ADAL 230 4/28/2023 5/3/2023 $10.48
7 Acq SVNA 230 4/24/2023 5/10/2023 $10.48
Orion Biotech Opportunities ORIA 200 4/25/2023 5/17/2023 $10.27
Skydeck Acq SKYA 222 4/24/2023 5/21/2023 $10.27

Registrations Withdrawn
Name Ticker Size ($mm) Underwriter Trust Funding Coverage
Stillwater Growth I SWGC 200 BofA 100.0% 1/3

Charter Extensions

  • DUET extended its charter through 1/24/2024 with a monthly $175,000 ($0.035 per share) sponsor contribution to trust and 58% of public shares remaining.
  • BRLI extended its charter through 7/23/2023 with a monthly $0.08 per share sponsor contribution to trust and 9% of public shares remaining.
  • ICNC extended its charter through 4/26/2024 with a monthly $120,000 ($0.009 per share) sponsor contribution to trust and 39% of public shares remaining.
  • CCTS extended its charter through 11/2/2023 with a monthly $40,000 ($0.016 per share) sponsor contribution to trust and 19% of public shares remaining.
  • ENTF extended its charter through 10/21/2023 with a monthly $150,000 ($0.022 per share) sponsor contribution to trust and 23% of public shares remaining.
  • GRCY extended its charter through 10/28/2023 with a monthly $0.033 per share contribution to trust and 5% of public shares remaining.
  • FIAC extended its charter through 5/1/2024 with a monthly $162,500 ($0.028 per share) sponsor contribution to trust and 25% of public shares remaining.
  • PCCT extended its charter through 11/1/2023 with a monthly $0.04 per share sponsor contribution to trust and 9% of public shares remaining.
  • PHYT extended its charter through 4/29/2024 with a monthly $160,000 ($0.018 per share) sponsor contribution to trust and 45% of public shares remaining.
  • SUAC extended its charter through 11/19/2023 with no sponsor contribution to trust and 14% of public shares remaining.
  • JAQC extended its charter through 12/17/2023 with no sponsor contribution to trust and 9% of public shares remaining.
  • AEAE extended its charter through 5/2/2024 with no sponsor contribution to trust and 7% of public shares remaining.
  • PGSS extended its charter through 7/26/2023 with a single $0.10 per share sponsor contribution to trust.
  • MBSC extended its charter through 7/26/2023 with a single $1,696,500 ($0.057 per share) sponsor contribution to trust.
  • MOBV extended its charter through 6/8/2023 with a single $0.033 per share sponsor contribution to trust.
  • PEGR extended its charter through 8/2/2023 by signing an LOI with an unspecified target company.

Upcoming Meetings and Deadlines

  • 5/1/2023 VSAC Charter amendment meeting (5/3/2023 Liquidation deadline)
  • 5/2/2023 BWAQ Charter amendment meeting (5/2/2023 Liquidation deadline)
  • 5/2/2023 CLRC Liquidation deadline (pending optional $0.10 deposit extension)
  • 5/2/2023 JUN Charter amendment meeting (5/8/2023 Liquidation deadline)
  • 5/2/2023 AEAE Liquidation deadline
  • 5/2/2023 JWAC Chijet Motor Company vote
  • 5/3/2023 ACAX Liquidation deadline (pending optional $0.10 deposit extension)
  • 5/3/2023 INTE Charter amendment meeting (5/5/2023 Liquidation deadline)
  • 5/4/2023 TGVC Charter amendment meeting (5/5/2023 Liquidation deadline)
  • 5/4/2023 CNDB Charter amendment meeting (5/8/2023 Liquidation deadline)
  • 5/5/2023 MAQC Charter amendment meeting (5/7/2023 Liquidation deadline)
  • 5/5/2023 TRAQ Liquidation deadline (pending optional $0.05 deposit extension)
  • 5/5/2023 NPAB Charter amendment meeting (5/9/2023 Liquidation deadline)
  • 5/5/2023 CBRG Charter amendment meeting (pending optional $0.10 deposit extension) (5/15/2023 Liquidation deadline)
  • 5/5/2023 PTWO Charter amendment meeting (5/9/2023 Liquidation deadline)
  • 5/5/2023 APGB Charter amendment meeting (5/12/2023 Liquidation deadline)
  • 5/5/2023 VMGA Charter amendment meeting (5/15/2023 Liquidation deadline)
  • 5/6/2023 VLAT Liquidation deadline

Links

  • Bloomberg reported that Cooper Morgenthau, ex-CFO of African Gold Acquisition Corporation (AGAC) was sentenced to three years in prison for a scheme to embezzle more than $5mm to trade crypto assets and meme stocks.
Disclosures: Site administrators may maintain positions in various SPAC securities and may trade in or out of those securities at any time without notice. Information from spacresearch.com is provided for informational purposes only and should not be relied upon as the basis for any investment decision. Nothing on spacresearch.com is a recommendation or solicitation to buy or sell any investment.
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