SUBSPAC

Make SPACs Great Again

Today we cover $DWAC, $WE, $MIR and, more…

In today’s Dish, we look at $DWAC’s explosive debut, the biggest winners from the run up, and where the SPAC is headed next. Also, WeWork makes a strong statement on its debut and Goldman Sachs wants to make the SPAC market more sustainable. Read on to find out about all things SPACs.


SPACs to Watch Today

$DWAC Pops, Warrant Holders & Hedge Funds Win Big 

  • Shares of DWAC closed with gains of 350%, Warrants ended the day 2000% higher, and the SPAC set to continue its explosive run today. 

Digital World Acquisition announced a merger agreement with Trump Media and Technology Group yesterday which sent shares in a frenzy. Shares of DWAC closed 350% higher, making it one of the hottest SPAC debuts in recent history.

DWAC stock outpaced the rest of the market in terms of volume, with 477 million shares traded (the next biggest SPAC was $GOGN at 12.1 million). While the stock was up over 450% at one point, the warrants tied to DWAC rallied as much as 2600% (closing 2071% higher).

According to the S1 filing, DWAC Warrants have a strike price of $11.5, which meant that they were still in the money when shares closed at day’s end (DWAC Warrants closed at $11.29). DWAC is set to continue its rally today, as the stock was up 60% ($73) pre-market.

Perhaps the biggest winners from the surge in the SPAC were the dozen or so hedge funds that had invested a month before the announcement. Some of them include D.E Shaw, Yakira Capital, Meteora Capital, and Hudson Bay Capital. Other beneficiaries include the CEO and CFO of the SPAC, who bought 11 million shares in September. 

$WE Sparks on Debut, Set for a Strong Open Today

  • WeWork had a strong debut after its merger with BowX with the stock closing 13% higher.  

WeWork stock closed 13.5% higher in a debut after it brushed off skepticism from the street. WeWork is set to build on yesterday’s gains, with the stock up 6% pre-market. The company’s Chairmen Marcelo Claure stated that taking a company that was marred with controversy and essentially valued at zero to a valuation of $8 or $9 billion was an achievement by itself.

Former CEO Adam Neumann had reason to celebrate as he still holds approximately an 11% stake in the company. Reports suggest that both Neumann and majority shareholder SoftBank won’t be allowed to sell shares for another 9 months. 


Goldman Sachs Aims to Build an Investor-Friendly SPAC Model 

  • With questions and potential regulations about SPAC sponsor compensation, Goldman Sachs wants to transform the landscape with better-aligned incentives. 

Goldman Sachs is looking to change the way SPACs function by aligning investor interest with insider incentives. Unlike traditional SPACs which entitle sponsors to 20% of the total shares outstanding following the IPO, Sponsors in the Goldman deal will only get paid when shares rise more than 20%.

Tom Knott, the Head of Goldman’s emerging SPAC Business, believes that an upfront payment would result in stretching valuations through far-fetched revenue projections. Goldman just closed its second SPAC deal with Mirion Technologies on Thursday. Its previous deal with Vertiv holdings valued the data center equipment company at more than $5 billion and has been largely successful, with shares doubling since.


Reddit Reads

$SEAH Continues New Market Expansion

Super Group, the parent company of global online sports betting and gaming businesses operating Betway today continued its new market expansion with the addition of a fifth live market in the U.S. as well as a new license in Europe. The Betway brand now has gone live in Iowa, joining Colorado, Indiana, New Jersey, and Pennsylvania. Additionally, in Europe, Betway has been granted a license in Poland were once launched, the brand is expected to leverage the global appeal of existing partnerships including their Bundesliga deals in neighboring Germany.

$DWAC buyers on the floor of the NYSE today…


SPAC Deals Approved 

$SGAM Shareholders Approve Redbox Merger 

Shareholders of Seaport Global Acquisition Corporation approved the merger between SGAM and Redwood Intermediate with 12.7 million shares (88% of shares outstanding) redeemed.


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