What happened
Yesterday was a very good day for investors in unproven stocks of special purpose acquisition companies (SPAC), which are designed to acquire real operating companies and then disclose them through a reverse merger IPO. But today it is a little different.
From 1.50 pm EST, shares of Bridgetown Holdings Limited (NASDAQ: BTWN) fell 7.2%, Longview Acquisition Corp. (NYSE: LGVW) fell 8.3%, and Tuscan Holdings Corp. (NASDAQ: THCB) it’s doing worse than anything – up to 10%.
Image source: Getty Images.
And
Disturbingly for investors who have invested their money in these “blank check companies” shares, there is no real news behind the stock price movements in any of these three names today. No SEC file was filed, no analyst report was written, nor did any of the three companies issue press releases of their own importance. In the absence of any real “news”, therefore, today I just want to do a quick review of what these companies are and what they plan to do.
Tuscan Holdings announced in early November plans to combine and bring the company to “next generation battery technologies” to the public and Fiat-partner Microvast Inc. Tuscan noted at the time that Microvast battery technology is already installed in more than 28,000 vehicles worldwide and that the company will generate more than $ 100 million in sales this year. Oddly for a SPAC company, Tuscan did not try to predict what value Microvast would make public – or even name a closing date for the transaction.
Just a week later, Longview Acquisition announced its own IPO plans, saying it will acquire and make public the Bill and Melinda Gates Foundation medical imaging company, Butterfly Network, which has an ultrasound transducer that says “it will do ‘images of whole body ‘with a single portable probe using semiconductor technology. “Longview is promising a pro forma business value of $ 1.5 billion for the combined company as soon as it goes public in the first quarter of 2021.
Bridgetown Holdings is a little bit different. Although Bridgetown conducted its own IPO in October, promising investors that it would be looking to acquire a technology, financial services or media company in Southeast Asia and try to make it public in a reverse merger IPO, Bridgetown has not yet announced an object of its own. affections. Two weeks ago, Barron’s reported that Bridgetown was looking to acquire Indonesian e-commerce company Tokopedia – but no deal has been announced yet. At the moment, Bridgetown Holdings remains a buyer looking for a seller.
What now
And yet, if you noticed, Bridgetown’s shares currently sell for almost $ 16 each, and therefore almost 60% more than the IPO of just two months ago. Say what you want about Tuscan Holdings being traded for more than $ 17 per share today, and therefore 70% above its IPO price, or Longview trading north of $ 20 per share – a clean double. At least these two SPACs have real, identifiable deals that they intend to bring to the public.
Two months after starting its search for an acquisition, however, Bridgetown still has nothing to offer its investors – which raises the question of why, exactly, investors are willing to pay a 60% premium to own a part of that nothing?
Judging by today’s price movement, it appears that more than a few Bridgetown investors are beginning to wonder about it.