Today we Cover $DUNE, $PAQCW, $RBOT and more…
Today’s Dish covers a trading firm that has set its sight on the public markets, yet another institution joining in on the SPAC regulation party, and an Asian Challenger to NerdWallet closing in on a SPAC deal. Read along to find the latest on all things SPACs.
Next Generation trading platform TradeZero is going public through a SPAC merger with Dune Acquisition Corporation in a deal that values the combined company at an enterprise valuation of $556 million ($716 million equity value). TradeZero will receive $160 million in cash proceeds from the merger, with the transaction valuing the company at a price/earnings multiple of 14.9x of the projected net income in FY22.
The company will list on the NYSE after the merger closes under the ticker symbol ‘TRAD’. CEO Daniel Pipitone has stated that TradeZero is a platform that wants to level the playing field for retail traders when making trades in US Equities and Options. The company certainly has strong unit economics, with annual revenues per account of $4,000, while customer acquisition costs are $225, leading to a revenue/CAC ratio off around 17.5x.
TradeZero aims to differentiate itself from the crowded space which includes Robinhood, SoFi, and WeBull by offering features like free limit orders, higher day trading leverage combined with its trading software ZeroPro (Think Benzinga but integrated with the TradeZero platform) in addition to commission-free stock trading offered by its peers.
The Financial Industry Regulatory Authority is now looking into how firms offer and provide services to SPACs. FINRA will ask targeted firms to detail all SPAC Activities from July 1, 2018, to September 30 of this year and will review all firm policy and procedures related to public offerings, due diligence, suitability, and communications with customers.
The sweep by FINRA follows an internal inquiry by SEC Chairman Gary Gensler to update the rules on SPACs to ensure that investors are better informed about the costs, fees, and conflicts that exist with SPACs.
The regulations should ensure better transparency, lower the risk of fraud and unravel complex financial layers that are often structured in with the SPAC deals. But the regulations could also slow down SPAC activity, which has succeeded primarily as it cuts the red tape and speeds up the process of going public when compared with a traditional IPO. Investors should see regulatory clarity over SPACs in the next few quarters.
ESS Tech, which is backed by Bill Gates starts trading today. The SPAC transaction that saw the company list had an 83% redemption of 25 million shares, leaving a free float of around 4.2 million shares.
Piper Jaffray has initiated coverage on Vicarious Surgical with an Overweight rating and a $16 price target.
Hyphen Group, a firm that is backed by Billionaire Richard Li, is in talks with SPAC Provident Acquisition Corp in a deal that could value the firm at $1 billion and include a PIPE placement of $100 million.
Hyphen was formerly known as CompareAsiaGroup and helps consumers find the right credit cars, personal loans, and other financial products with the help of tech-driven compassion tools. The company has more than 11 million monthly active users across eight brands and has expanded recently with the acquisitions of Singapore personal firm Seedly from ShopBack.
Hyphen was last valued at $500 million in July and has so far raised more than $110 million from Pacific Century Group, Alibaba Group Holdings, and Goldman Sachs. Merger talks are in the advanced stages and the transaction could be announced by the end of the year.
Provident Acquisition, which is led by Winato Kartono and Michael Aw raised $230 million in an IPO in January, to acquire companies focused on consumer technology in Southeast Asia. Hyphen’s group of companies include MoneyHero, SingSaver, MoneyGuru, MoneyMax, and Seedly. These companies primarily target an Audience in Asia and are comparable to NerdWallet (Who announced IPO Plans last week) in the US.