You could get this stock for US$10.75 today. I will bite if I could get it for $10.30. With this price it is very little downside. I will expect to price will up to $13 when the merger date is announced and up again to $15 short after the merger is approved. But if it does not it is highly unlikely they will falll below $10.30.
That’s the part I don’t entirely get. The company merging on the cheap, and investors in this taking all the gains.
It all depends on the value set of the other party, and the real world value perception.
The merger approved, is not the same with go public !! it will still take a few days before the ticker symbol changed. In the normal SPAC life cycle it will pop up a little for a few days hopefully to $15.
After the SPAC trade with new ticker symbol it will drop as the many people will liquidate their position (thus taking profit) and move money to another stock/SPAC.
I normally liquidate my SPAC position before ticker symbol changed. I might reenter again later with lower price when I believe the stock has a long term prospect.
That’s the part that doesn’t always pass the logic sense to me.
To merge into something at $10 a share, to then miraculously become $15 a share almost overnight means the company was merged at a discounted valuation.
A slight increase yes as the company will receive much needed funding likely as part of the deal, but not 50%.
What date will it actually start trading under its own Ticker?
That’s what SPACs are, they trade on news and sentiment.
Post merger if you look at a lot of SPACs they are sub 10 after a short period of time.
SPACs also used to be really easy to trade but they don’t tend to pop up as much now on news
That is the pattern of the “blockbuster” SPAC lifecycle. If you follow Nikola (NKLA) quite similar pattern
But this pattern has been broken recently due to sentiment against the SPAC and a lot of shortsellers attacks using law suit, exegarating the case to scare retail investors. Also not to mention the sector rotation against the tech stocks which represent the vast majority of the SPAC targets.
The explanation like this many people believe the value of the SPAC more than the current price but they want to see evidence that it will go public. Whale investors, PIPE will not be able to sell their stock before the SPAC trades with a new ticker symbol. So, they will not be able to do it in this narrow slot.
After the ticker symbol change, some of whakes investors will dump their shares ready for another punt. Thus reflected in significant price drop after trading in new ticker symbol before it bounces back again.
In SPAC investing it is important to differentiate before (SPAC Speculation) and after the ticker symbol change (long term investment)
They have not decided yet. the IPO date is 2020-09-24 so is should be before 2022-09-24. But in many cases it just takes a few months if they have found the target, So it might be this year.
I am in on VACQ and HOL, looking to add SFTW and NSH as well.
Buy a relatively small position now, then add and hold after the merger and ticker change.
These are part of my 2025 protfolio.
@SpikeTrademark If you intend to trade it (buy/sell frequently), it might not be a good strategy nowadays due the introduction of the FX fee that will apply eveytime you buy/sell.
I’m holding SFTW. Average 10,67. After read (as mentioned earlier in the thread) that Thiel is involved it kinda moved the needle in the direction of investing. Now patiently waiting.
It is buy and hold, not trading.
As that FX fee is a percentage of the value, doesn´t really matter if I buy smaller packages or a big package less frequently.
But true, for those trading the FX fee makes it less attractive.
They’ve got some coverage on CNBC here.