{"id":1194090,"date":"2020-07-06T13:58:37","date_gmt":"2020-07-06T18:58:37","guid":{"rendered":"https:\/\/commonstockwarrants.com\/?p=683931"},"modified":"2020-07-06T13:58:37","modified_gmt":"2020-07-06T18:58:37","slug":"spacs-are-booming-these-21-may-be-about-to-announce-deals","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1194090","title":{"rendered":"SPACs Are Booming. These 21 May Be About to Announce Deals"},"content":{"rendered":"
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By\u00a0Nicholas Jasinski\u00a0\u00a0\u00a0<\/a><\/span>July 6, 2020 6:00 am ET<\/p>\n

Editors Note from Dudley Pierce Baker at CommonStockWarrants.com\u00a0<\/a>:<\/strong><\/p>\n

Our interest here at CSW is that all of the SPAC’s (blank check companies<\/a>) have a stock warrant which will have a 5-year life starting from the time of the merger of the SPAC with another company. Interesting long-term opportunities here for greatly increased upside leverage potential with the stock warrants. Currently, we have over 65 blank check companies in our database, all of which are looking for mergers<\/span>. I have not verified the information in the article below but there are many more SPAC’s trading than what the article says.<\/p>\n<\/div>\n

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Bryan R. Smith\/Getty Images<\/span><\/figcaption><\/figure>\n<\/div>\n

This year has\u00a0become a boom year<\/a>\u00a0for special purpose acquisition companies, or SPACs. Some postmerger returns have been stunning, including those of\u00a0Nikola Motors<\/a>,<\/span>\u00a0Virgin Galactic<\/a>,<\/span>\u00a0and\u00a0DraftKings<\/a>\u00a0\u2014all of which went public by combining with SPACs. New SPAC issuance is soaring, with multiple initial public offerings a week for several weeks running. And big names like\u00a0Bill Ackman want in<\/a>.<\/p>\n

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More recently, investors have\u00a0begun bidding up shares of SPACs<\/a>\u00a0that have agreed to attractive deals, but months before their combinations close. Tortoise Acquisition (ticker: SHLL), which will merge with electric-truck company Hyliion this fall, has\u00a0nearly tripled since its deal announcement<\/a>\u00a0in June. On Monday, shares of\u00a0Landcadia Holdings II<\/a>\u00a0(LCA), a SPAC sponsored by Landry\u2019s CEO and Houston Rockets owner Tilman Fertitta, said it plans to merge with Fertitta\u2019s Golden Nugget gaming franchise. The stock popped more than 50% in the next two days.<\/p>\n

Also known as \u201cblank-check companies,\u201d<\/a>\u00a0SPACs raise money from public and private investors and then identify an acquisition target and buy it, typically within two years.\u00a0Barron\u2019s\u00a0<\/em>screened for SPACs that are less than six months from their deadlines (thus might be about to announce deals), and compared their market prices to their current estimated trust value per share.<\/p>\n

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Expiring SPACs<\/h2>\n

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Company<\/th>\nTicker<\/th>\nRecent Price<\/th>\nEst. Trust Value Per Share<\/th>\nDisc.\/Prem. to Trust<\/th>\nCompletion Deadline<\/th>\nTarget Industry<\/th>\n<\/tr>\n<\/thead>\n
Big Rock Partners<\/td>\nBRPA<\/td>\n$11.05<\/td>\n$10.80<\/td>\n2.26%<\/td>\n7\/23\/2020<\/td>\nSenior Housing Real Estate<\/td>\n<\/tr>\n
Tenzing<\/td>\nTZAC<\/td>\n$10.84<\/td>\n$10.72<\/td>\n1.11%<\/td>\n7\/27\/2020<\/td>\nIndia<\/td>\n<\/tr>\n
Graf Industrial<\/td>\nGRAF<\/td>\n$14.14<\/td>\n$10.24<\/td>\n27.58%<\/td>\n7\/31\/2020<\/td>\nIndustrials<\/td>\n<\/tr>\n
Andina III<\/td>\nANDA<\/td>\n$10.26<\/td>\n$10.27<\/td>\n-0.10%<\/td>\n8\/2\/2020<\/td>\nAmericas<\/td>\n<\/tr>\n
Orisun<\/td>\nORSN<\/td>\n$10.13<\/td>\n$10.12<\/td>\n0.10%<\/td>\n8\/6\/2020<\/td>\nTechnology<\/td>\n<\/tr>\n
Tottenham<\/td>\nTOTA<\/td>\n$10.77<\/td>\n$10.81<\/td>\n-0.37%<\/td>\n8\/6\/2020<\/td>\nChina<\/td>\n<\/tr>\n
AGBA Acquisition<\/td>\nAGBA<\/td>\n$10.23<\/td>\n$10.26<\/td>\n-0.29%<\/td>\n8\/16\/2020<\/td>\nChina<\/td>\n<\/tr>\n
Spartan Energy<\/td>\nSPAQ<\/td>\n$10.75<\/td>\n$10.33<\/td>\n3.91%<\/td>\n8\/14\/2020<\/td>\nEnergy<\/td>\n<\/tr>\n
Megalith Financial<\/td>\nMFAC<\/td>\n$10.90<\/td>\n$10.45<\/td>\n4.13%<\/td>\n8\/28\/2020<\/td>\nFintech<\/td>\n<\/tr>\n
Hennessy IV<\/td>\nHCAC<\/td>\n$10.65<\/td>\n$10.32<\/td>\n3.10%<\/td>\n9\/3\/2020<\/td>\nIndustrials<\/td>\n<\/tr>\n
Trident<\/td>\nTDAC<\/td>\n$10.80<\/td>\n$10.79<\/td>\n0.09%<\/td>\n9\/1\/2020<\/td>\nEnergy<\/td>\n<\/tr>\n
CF Finance<\/td>\nCFFA<\/td>\n$10.87<\/td>\n$10.36<\/td>\n4.69%<\/td>\n9\/17\/2020<\/td>\nFinance & Real Estate<\/td>\n<\/tr>\n
LF Capital<\/td>\nLFAC<\/td>\n$10.73<\/td>\n$10.48<\/td>\n2.33%<\/td>\n9\/22\/2020<\/td>\nFintech<\/td>\n<\/tr>\n
Schultze<\/td>\nSAMA<\/td>\n$10.22<\/td>\n$10.25<\/td>\n-0.29%<\/td>\n9\/30\/2020<\/td>\nRestructured Companies<\/td>\n<\/tr>\n
AMCI<\/td>\nAMCI<\/td>\n$10.33<\/td>\n$10.24<\/td>\n0.87%<\/td>\n10\/20\/2020<\/td>\nNatural Resources<\/td>\n<\/tr>\n
Alberton<\/td>\nALAC<\/td>\n$10.71<\/td>\n$10.62<\/td>\n0.84%<\/td>\n10\/26\/2020<\/td>\nGeneral<\/td>\n<\/tr>\n
GreenVision<\/td>\nGRNV<\/td>\n$9.99<\/td>\n$10.10<\/td>\n-1.10%<\/td>\n11\/21\/2020<\/td>\nHealth Care<\/td>\n<\/tr>\n
Fintech III<\/td>\nFTAC<\/td>\n$11.13<\/td>\n$10.28<\/td>\n7.64%<\/td>\n11\/20\/2020<\/td>\nFintech<\/td>\n<\/tr>\n
Longevity<\/td>\nLOAC<\/td>\n$10.61<\/td>\n$10.65<\/td>\n-0.38%<\/td>\n11\/30\/2020<\/td>\nChina<\/td>\n<\/tr>\n
Tuscan<\/td>\nTHCB<\/td>\n$10.24<\/td>\n$10.21<\/td>\n0.29%<\/td>\n12\/6\/2020<\/td>\nCannabis<\/td>\n<\/tr>\n
GigCapital2<\/td>\nGIX<\/td>\n$10.16<\/td>\n$10.16<\/td>\n0.00%<\/td>\n12\/10\/2020<\/td>\nTechnology, Media, and Telecom<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n

(Use the scrollbar at bottom to view all columns.)<\/p>\n

Source: SPACInsider, FactSet<\/p>\n<\/div>\n<\/div>\n<\/div>\n

(If you cannot view the table above,\u00a0please click here<\/a>.)<\/em><\/p>\n

There are 21 SPACs on the market searching for targets that have less than half a year before their completion dates. Of those, just five trade below their estimated trust value as calculated by SPACInsider, a website devoted to research and data about SPACs.<\/p>\n

By convention,\u00a0SPACs sell units in an initial public offering<\/a>\u00a0at $10 each, which gives investors a common share and a fraction of a warrant. The cash raised in a SPAC IPO goes into a trust, where it earns interest until the merger is completed. At that time, shareholders can redeem their stock for a proportionate share of the cash in the SPAC\u2019s trust.<\/p>\n

That creates a nearly risk-free arbitrage opportunity: buying a SPAC\u2019s shares when they\u2019re trading at a discount to the cash in its trust. By holding through the SPAC\u2019s merger, investors can earn a minimum of that discount plus the yield on U.S. Treasurys that the SPAC holds. If the SPAC\u2019s deal is a dud, or if sponsors can\u2019t find one by the deadline, the shareholder redeems his or her shares and receives the trust value. If the deal is a hit and the shares trade higher than the trust value, investors can sell at the market price.<\/p>\n

For example, at a recent $9.99 per share,\u00a0GreenVision Acquisition<\/a>\u00a0Corp.<\/span>\u00a0(GRNV) trades for a 1.1% discount to its $10.10 estimated trust value per share. Its deadline is Nov. 21, but the\u00a0SPAC\u2019s sponsor has the option to extend<\/a>\u00a0by three months twice, each time adding 10 cents per share to the trust.<\/p>\n

The arbitrage opportunity is simple, and investors can lock in a risk-free\u2014albeit modest\u2014gain. Should investors hold for about five months through GreenVision\u2019s original deadline and redeem for cash, they can receive an annualized 2.64% yield. A one-year Treasury bill yields 0.17%.<\/p>\n

The odds of a blockbuster acquisition that causes GreenVision\u2019s stock to soar appear smaller. For starters, the SPAC is on the small side, with just $57.5 million in its trust\u2014it\u2019s targeting a combination with a business valued at $100 million to $300 million in the health care and life science industries. GreenVision\u2019s sponsors are its CEO David Fu and CFO Karl Ye, both with backgrounds in mergers and acquisitions but relatively unknown players, and its underwriter is I-Bankers Securities.<\/p>\n

A better chance for a merger-announcement stock pop might come from FinTech Acquisition Corp. III (FTAC), the third SPAC from a team focused on targets in fintech. Its CEO, Daniel Cohen, was involved in the first two FinTech SPACs, and holds board or executive positions at payments and banking firm The\u00a0Bancorp\u00a0<\/a>(TBBK) and investment firm\u00a0Cohen & Company<\/a>\u00a0(COHN).\u00a0IPO proceeds were $345 million<\/a>\u00a0and the SPAC\u2019s deadline is Nov. 20.<\/p>\n

Fintech Acquisition I merged with payment processor CardConnect in 2016, and was later acquired by First Data (now\u00a0Fiserv<\/a>\u00a0) at $15 a share. FinTech Acquisition II combined with\u00a0International Money Express<\/a>\u00a0(IMXI) in 2018. The stock recently traded for $12.61.<\/p>\n

That\u2019s a solid record, and the fintech and payments space is just as hot today. But the market expects an attractive deal: Fintech III\u2019s shares recently traded for $11.13, a 7.6% premium to its estimated trust value.<\/p>\n

One word of caution, however: If a SPAC can\u2019t consummate a merger within its specified term, its trust is liquidated and returned to stockholders, while warrants expire worthless. That gives sponsors an incentive to get a deal done\u2014but also means investors should pay particularly close attention to transactions announced right before the deadline, when the pressure to find one is highest.<\/p>\n

Write to\u00a0<\/strong>Nicholas Jasinski at\u00a0nicholas.jasinski@barrons.com<\/a><\/p>\n

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 <\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

  By Nicholas Jasinski   July 6, 2020 6:00 am ET Editors Note from Dudley Pierce Baker at CommonStockWarrants.com : Our interest here at CSW is that all of the SPAC’s (blank check companies) have a stock warrant which will have a 5-year life starting from the time of the merger of the SPAC with another company. Interesting long-term opportunities here for greatly increased upside leverage potential with the stock warrants. Currently, we have over 65 blank check companies in our database, all of which are looking for mergers. I have not verified the information in the article below but there are many more SPAC’s trading than what the article says. Bryan R. Smith\/Getty Images This year has become a boom year for special purpose acquisition companies, or SPACs. Some postmerger returns have been stunning, including those of Nikola Motors, Virgin Galactic, and DraftKings —all of which went public by combining with SPACs. New SPAC issuance is soaring, with multiple initial public offerings a week for several weeks running. And big names like Bill Ackman want in. More recently, investors have begun bidding up shares of SPACs that have agreed to attractive deals, but months before their combinations close. Tortoise Acquisition (ticker: SHLL), which will merge with electric-truck company Hyliion this fall, has nearly tripled since its deal announcement in June. On Monday, shares of Landcadia Holdings II (LCA), a SPAC sponsored by Landry’s CEO and Houston Rockets owner Tilman Fertitta, said it plans to merge with Fertitta’s Golden Nugget gaming franchise. The stock popped more than 50% in the next two days. Also known as “blank-check companies,” SPACs … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":50,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[3023,372,2,777,3024],"tags":[135,338],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1194090"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/50"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1194090"}],"version-history":[{"count":1,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1194090\/revisions"}],"predecessor-version":[{"id":1194091,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1194090\/revisions\/1194091"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1194090"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1194090"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1194090"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}