Gores waltzes into the EV SPAC bonanza, but gets originality points for revenue
The Nightcap newsletter: SPAC Track’s nightly recap of the action in the SPAC world. (September 27, 2021)
Discover and track all of the SPACs at spactrack.net.
The Stats:
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The Deals:
1) Gores Guggenheim, Inc. (GGPI: warrants +26.4%) & Polestar
Merger Partner Description:
Polestar is a Swedish premium electric performance car brand founded by Volvo Cars and Geely Holding. Established in 2017, Polestar enjoys specific technological and engineering synergies with Volvo Cars and benefits from significant economies of scale as a result. The Company is headquartered in Gothenburg, Sweden, and its vehicles are available and on the road in fourteen active global markets across Europe, North America, and China. In 2021, Polestar is expanding into five new markets in the Asia Pacific region.
Valuation: $20B EV (3x 2023 projected revenue)
PIPE: $250M
News:
Indonesian tech start-ups abandon US Spac deal plans in favour of going local (FT—paywalled)
The blockbuster domestic listing of Indonesian ecommerce group Bukalapak has prompted other start-ups in the country to abandon plans for overseas share offerings in favour of going local, signalling a payday for their foreign backers.
International investor interest in Indonesia’s tech sector has surged, with group’s including Facebook, Microsoft, Tencent, Alibaba, Google and private equity firms KKR and Warburg Pincus piling into local start-ups.
South-east Asia’s biggest economy, Indonesia has the region’s largest crop of unicorns, or privately held start-ups, valued at more than $1bn.
Until Bukalapak’s $1.5bn listing in August, however, none had successfully listed on a stock market, a crucial step in the start-up lifecycle for global investors.
Now, other Indonesian tech groups are considering the Indonesia Stock Exchange (IDX) as a credible alternative to international initial public offerings. Conglomerate MNC Group, founded by billionaire Hary Tanoesoedibjo, has dropped a plan to list its video-streaming service in the US through a merger with a blank-cheque vehicle this month.
“When you get an exit like that [Bukalapak], it gets the attention of later-stage funds,” said William Bao Bean, general partner at global venture capital fund SOSV. “Not only that it was a successful one and it has fired the starting gun, [but] we should [also] see a funding surge going into the market from international investors.”
The IDX has sought to attract more tech names though the introduction of regulations to accommodate the sector, such as dual-class shares that would give founders and existing shareholders more control of their companies.
Bukalapak, an online marketplace backed by Microsoft, Chinese billionaire Jack Ma’s fintech company Ant Group and Singapore’s sovereign fund GIC, upsized its IPO from an initial target of $300m to $1.5bn, which made it the country’s biggest-ever stock market listing.
After Early Investors Flee SPAC Deals, Day Traders Rush In (WSJ—paywalled)
Investor withdrawals were minimal early in the year as SPAC shares soared, but have risen with many blank-check companies trading below their listing price. For much of the summer, high withdrawals contributed to the sector’s malaise. Now, they are helping drive new interest in the sector, along with hair-raising stock moves.
A number of factors are boosting shares after SPAC deals close, investors say. Large investor withdrawals reduce the number of shares available to trade, also known as a stock’s float. That scarcity means it doesn’t take much to swing the stock. Companies that go public via SPACs are also popular targets for short sellers, who wager on stock-price declines, a trend that can attract day traders hoping to “squeeze” the professionals by bidding up the shares.
Short sellers borrow shares, sell them, then aim to buy them back at lower prices. A low float also makes it challenging for traders to borrow shares. That means it can be relatively easy to force those trying to wager on share-price declines to limit losses by buying, analysts say, adding fuel to rallies.
Rising trading in options—which give the holder the right to buy a stock at a certain price in the future—is also playing a role. Market makers that sell options often hedge by buying shares of the underlying stock, a force that can help amplify share-price gains.
IronNet recently issued additional shares to company insiders because the stock had stayed above a certain level for a period of time. Such “earnout” provisions are common in SPAC deals.
Some individuals in recent months piling into stocks popular on social media have claimed they hope to hurt professional short sellers by pushing up share prices. Yet large institutions often benefit on paper from such activity. Hedge-fund giant Bridgewater Associates is an IronNet investor.
Quick News Corner:
Sarcos Robotics (STRC: $9.10 -8.91%) completed its merger with Rotor Acquisition Corp. (ROT). ROT began trading as STRC today.
The transaction raised over $260M in gross proceeds, putting the estimated redemption at ~86%
Proterra Inc (PTRA: $10.87 +7.41%) announced that it will redeem all of its public warrants with the deadline to redeem set for 10/27
dMY Technology Group III (DMYI: $11.94 +5.66%) and IonQ announces single-digit redemptions ahead of the merger vote meeting tomorrow, resulting in over $600M proceeds for IonQ
Hennessy Capital Investment Corp. V (HCIC) and its merger partner, PlusAI, have entered into discussions regarding potential merger restructuring due to “recent developments in the regulatory environment outside of the United States” and thus the outside date of merger closing will likely be delayed past Nov 8.
“While HCIC intends to work in good faith with Plus and its shareholders to reach mutually agreeable terms for such a restructuring and amendment, there can be no assurance that the parties will be able to agree upon such a restructuring and amendment or, if they do, that the Business Combination (as so amended) will be successfully consummated. As of the date of this Current Report on Form 8-K, Plus has not received any inquiries or notices of investigation from any governmental or regulatory authorities and no permissions requested by Plus from a Chinese government entity have been denied.”
Tracking De-SPAC S-1s (including PIPE resale registrations):
Nexters (GDEV: $7.17 +6.54%) filed its 424B3 (meaning F-1 is likely to go effective tomorrow)
AgileThought (AGIL: $12.26 +1.83%) filed its 424B3 (meaning S-1 is likely to go effective tomorrow)
AEye (LIDR: $7.61 -1.30%) filed its 424B3 (meaning S-1 is likely to go effective tomorrow)
Cellebrite DI (CLBT: $10.36 +0.88%) filed its S-1
IPOs to Begin Trading Tomorrow*:
1) Berenson Acquisition Corp. I Announces Pricing of $250 Million Initial Public Offering (BACA-U)
2) Parabellum Acquisition Corp. Announces Pricing of $125,000,000 Initial Public Offering (PRBM-U)
*priced at the time of this writing
New S-1s (1):
1) Worldwide Webb Acquisition Corp. (WWAC)
$200M, 1/2 Warrant
Focus: Internet/ Tech
Management:
Tony Pearce (Co-founder & Former Co-CEO of Purple Innovation)
Terry Pearce (Co-founder & Former Co-CEO of Purple Innovation)
Directors:
Lynne Laube (Co-founder & CEO of Cardlytics)
Upcoming Dates:
This Week’s Announced Shareholder Meetings, Unit Splits, Warrant Redemptions, and Expected Ticker Changes
See the full calendar here.
Thanks for reading,