One of my favorite aspects of SPACs is they have several “built in” catalysts such as - Rumors, Letter of Intents, Definite Agreements, Extension Votes, Merger Votes, ticker changes, etc. Now, not all of these are equally impactful or guaranteed to have any impact at all, but they offer unique trading opportunities.
The average time from Definitive Agreement to merger completion is 4.5 months. The median time is 3.5 months. The shortest we’ve seen is 1.67 and 2 months. If you're not following SPAC Track, what are you doing?
Letter of Intents approaching ‘do or die’ time to ink Definite Agreement
The signing of a definite agreement often causes large moves in the SPAC price because it gives investors security that a deal is getting done (barring shareholder rejection), and is usually accompanied by an investor presentation that gives the first detailed look into a target’s financials, projections, and overall business. Remember, definite agreements can can also cause accelerated moves to the downside if the deal is not well received by the market, or the SPAC ran too high pre-deal — IPOC flashbacks anyone?
SCPE - have until 4/16 to close deal. LOI here (unnamed target currently)
THCB - have until 4/30 to close deal. LOI with Microvast on 11/13
TDAC - Have until 3/1 to close deal. LOI with lottery.com 11/19. Sounds like a done deal via the language in the filings, and the Board of Directors can vote to extend deadline by an additional 3 months if needed.
Credible Rumors to keep close tabs on
CCIV - Lucid Motors
THCA - Transfix
BTWN - Tokopedia - also in talks with Gojek for $18B merger
IACA - Taboola
LCY - Hillman Group
CFAC - AEye
PSAC - Faraday Future
WPF - Alight
FST - Fertitta Companies
Other situations worth watching
BRPA - topline data 1/21
ANDA - has until 1/31 to complete merger. Previously signed an LOI with EMMAC Life Sciences but negotiations were terminated on 11/4. They recently filed for an extension vote on 1/27 - have they found a new target? If they don’t release something to entice shareholders before the extension vote, expect heavy redemptions.
ZGYH - led by Patrick Orlando who recently filed for his own firm’s SPAC - BENEU. One must wonder if he has a deal in the works for ZGYH if filing for a second SPAC already.
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Disclosure: The above references are an opinion and are for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.