Today we cover $XPDI, $OPEN, $YAC, and more…
Bitcoin continues its pursuit towards a new all-time high with a rally this week. With the price of BTC firmly above $60K, one SPAC suddenly looks very lucrative. Later on, we look at the allegations that iBuying firms are rigging the housing market. Also, a former CEO is making a comeback into the world of Information Technology through a SPAC IPO. Read today’s Dish to find out the details about all things SPACs.
SPACs to Watch this Week
Bitcoin Mining Firm Core Scientific has been trading close to $10 since it announced a $4.3 Billion SPAC deal with Power & Digital Infrastructure Corp back in July. But with Bitcoin crossing $60K and looking to break a new ATH, Core Scientific stock is poised to surge. First, with Bitcoin crossing 60K, the company’s valuation has essentially doubled (SPAC Deal implied 4x FY22 Revenues when Bitcoin was priced at 31K).
Second, being the largest clean-energy Bitcoin miner in the US, Core Scientific mines BTC at scale with a break-even of only $2,700/BTC (or $4,600/BTC for hosted client equipment), ensuring that the business is already generating significant cash flows. Third, the crypto ban in China has been a significant tailwind for the company as US mining demand has gone up significantly. Core Scientific will directly benefit from this demand as it is planning to scale its mining capacity from 311MW currently to 1031MW by 2022. With $XPDI trading at a lower valuation compared to $RIOT and $MARA, a rally in the stock may be due soon.
Online Real estate firm Zillow saw its shares fall as much as 7% pre-market after the company stated that it would stop buying new homes and work to clear its current property backlog. Zillow has purchased more than 3,800 homes in the second quarter but has seen its shares come under pressure after a viral TikTok video stated that an unnamed company was pulling off a convoluted scheme to manipulate housing prices. With Zillow struggling to move homes, the question is if this will hurt/help market leader Opendoor.
At the end of Q2, Opendoor had 7,971 homes in inventory (representing $2.7 billion in value) and contracts to buy 8,158 homes (implying an additional $3 billion in value). With approximately 50% of the market share in iBuying, OpenDoor could be adversely affected by inventory risk if the market takes a downturn, but with the current state of affairs, the company is taking advantage of the competition’s misery. Opendoor Co-founder Keith Rabois was celebrating the company’s victory over Zillow on Twitter.
$YAC Upsizes PIPE and Agrees to Backstop Deal
SIGNA Sports United today announced additional PIPE investments of $70 million and a new redemption backstop agreement worth $178 million related to its merger with SPAC Yucaipa Acquisition Corporation.
SPAC Compass Digital Acquisition Corp debuted on Friday on the Nasdaq Global Markets under the ticker symbol ‘CDAQU’. The blank check company’s offering consisted of 20 million units priced at $10 each.
Compass Digital has strong leadership at the helm with former Wipro CEO Abidali Neemuchwala serving as CEO and former Citigroup CEO Vikram Pandit serving as a senior advisor to the board.
The SPAC intends to focus on technology-first IT and digital transformation software providers.
Neemuchwala, who was the CEO of Information Technology giant Wipro between 2016 and 2020 will look to use his experience to close a merger with a target company.