Today we cover $TWNT, $LCID, $TMC and more…
SPACs continue to be the best way for Space themed firms to go public. Also, as the infrastructure bill nears, EV-based SPACs lead gains and a deep sea mining firm continues to struggle with challenges. Read today’s dish to find the latest on all things SPACs.
Small Satellite manufacturer Terran Orbital, is going public through a SPAC merger with Tailwind Two Acquisition Corp (TWNT) in a deal valuing the combined company at $1.58 billion.
The deal will infuse the company with around $470 million, with $345 million coming from the SPAC Trust, $50 million PIPE by AE Industrial Partners, Beach Point Capital, Daniel Staton, Lockheed Martin, Fuel Venture Capital and an additional $75 million commitment from Francisco Partners and Beach Point Capital.
In addition to the capital from the SPAC transaction, the company will have access to approximately $125 million in debt commitment from Francisco Partners and Lockheed Martin. The deal has already received approval from the board of directors with the transaction expected to close in the first quarter of 2022.
Terran Orbital manufactures, designs, builds and engineers satellites for the US government on a contract basis, with approximately 95% of the company’s offering relayed to NASA and the Department of Defense.
In September, the company announced that it would open a 660,000 sq ft facility, which would be the world’s largest space vehicle manufacturing facility, at an investment of $300 million. In addition to manufacturing satellites, the company aims to operates its own earth operating constellation and deliver “satellite imagery as a service” (Similar to Satellogic, Blacksky and Planet Labs, which have also gone public through SPACs).
SPACs to Watch
Shares in Lucid Motors closed with gains of over 35% at close as investors anticipated potential gains from the EV credits in the Infrastructure Proposal.
Part of President Joe Biden’s proposed $1.75 trillion infrastructure proposal includes $320 billion of expanded tax breaks over the next ten years to support clean energy and electric vehicle adoption. The company also announced that the first deliveries of its Lucid Air dream sedan would begin on Saturday. As a result LCID shares surged over 47%, with shares expected to continue with gains today.
Lucid told investors in July that it expects to produce 20,000 Lucid Air sedans in 2022, generating more than $2.2 billion in revenue. Investors will have to wait till November 15th when the company files its Quarterly Earnings to hear more about the company’s plan, but there are plenty of tailwinds to support growth in the future.
The Metals Company Stock has fallen 70% over the past month amidst capital raising problems, legal challenges and environmental concerns.
Since closing at a high of $12.5 in September, TMC stock has slumped as a result of multiple headwinds. Part of the company’s SPAC deal involved generating $330 million in gross proceeds, but institutional investors have failed to deliver the promised funding. As a result, the company generated just $30 million in funding, and considering the fact that the company won’t generate revenues for the next few years, it might be a blow to prospective shareholders. As a result, the company is suing the investors (particularly Ramas Capital Management), in a bid to stay afloat. With disappointing stock performance, and in particular a report by short seller Bonitas Research, investors are now filing a class action lawsuit against the firm, further complicating legal matters.
The final nail in the coffin may be the regulatory challenges and opposition from environmental advocates to the company’s mining plan. Environmentalists like David Attenborough have long stood against deep sea mining, claiming that they could cause complications for the ecology that lies beneath the ocean. Even if the company manages to fight off the bad press, there is a chance that regulatory changes could increase exploration costs in the long run.
White Diamond Research Calls $MNTS the Worst-Themed SPAC
Short Seller White Dimond Research released a report calling momentus a colossal scam after it failed its launch test and former CEO Mikhail Kokorich misled investors.
A SPAC Loses Money in the Trust
SPAC $ZYGH lost money in its trust after it failed to invest the money in US treasuries as per the trust agreement. As a result, the company reported an unrealised loss of $1.15 million between March 31, 2020 and the reinvestment period.