At the SPAC of Dawn
SPACInsider readers have spoken once again, and this time SPAC watchers are predicting an upset.
Respondents to the latest Let’s Settle This poll are predicting the Kansas City Chiefs to win or at least come within two once Super Bowl LVIII hits the final buzzer this weekend.
Though not strictly a financial question, does this reflect SPACland’s preference for the underdog? For the experienced team with a couple of successful closings to a season already under their belt versus the analytics-driven newcomers?
Yesterday’s poll results revealed skepticism among SPAC professionals in Digital World’s ability to close its long-running campaign to combine with Trump Media and Technology Group. That skepticism may be reflected in the investor-friendly terms in the PIPE the SPAC just attached to the deal (see below).
Deals and Funding
- Digital World (NASDAQ:DWAC) has added a $50 million PIPE made up of convertible notes that convert to units at $8 per unit bearing one common share and a warrant if the the stock trades above 130% of this price. The SPAC may draw upon 20% of this investment ($10 million) immediately with the remainder due at closing. The parties have also issued 3,050,000 warrants, each granting the right to purchase one share at $11.50 per share that are transferable only among the holders’ affiliates.
- DIH Holding (NASDAQ:DHAI), which yesterday completed its combination with Aurora Technology, has added a $1.5 million subscription agreement, under which existing shareholder OrbiMed will purchase 150,000 shares at $10 per share and warrants to purchase 300,000 more with an exercise price of $10.
News and Rumors
- Hollywood Reporter: Lionsgate (NYSE:LGF) reported it ate a -$107.4 million third quarter loss in part due to factors like 2023’s writers and screen actors strikes. Its film and TV studio division, which it is spinning off in a combination with Screaming Eagle, saw a -23% revenue decline to $691.6 million during the period. The group overall turned a $15.2 million profit during the same period in 2022.
- CNBC: 23andMe (NASDAQ:ME) is considering splitting the company in two, dividing its consumer DNA kit division from its biotech research side to better cater to specialized investor bases. The company combined with VG in June 2021.
- Payload: Satellite firm BlackSky (NYSE:BKSY) has inked about $50 million-worth of contracts with the Indonesian Ministry of Defense to expand its orbital surveillance capabilities. BlackSky combined with Osprey Technology in September 2021.
- Bloomberg: The Claure Group has acquired a minority stake in technology firm Hedosophia, which itself co-sponsored six SPACs between 2017 and 2020 and participated in several PIPE transactions.
- Crown Proptech (NYSE:CPTK) adjourned its February 8 extension vote to 3 pm ET February 9. The record date remains January 29.
Contributions to trust are typically expected from sponsors looking to retain as much of the trust account as possible that need additional time to complete business combinations. With “time to complete” steadily increasing over the past months, redemptions from the trust account do not look to be slowing down, regardless of what SPAC teams do...
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