Fortune Rise Acquisition Corp (FRLA) Terminates VCV Power Sigma Deal
by Nicholas Alan Clayton on 2022-07-20 at 7:15am

Fortune Rise Acquisition Corp. (NASDAQ:FRLA) announced in an 8-K this morning that it has mutually terminated its combination with crypto mining business VCV Power Sigma.

As with yesterday’s termination of Aesther Healthcare’s combination with United Gear, the merger was just weeks old, having been announced on May 3 with an outside date in November. The deal also included included a $500,000 breakup free if either side failed to fulfill certain conditions through the de-SPAC process, but this appears to have not been invoked and was not mentioned.

More likely, the sharp tumble in the crypto market caused both sides to see this transaction in a different light. VCV provides computing infrastructure for crypto and Web3 networks and it plans a major expansion of bitcoin mines on its platform over the next three years.

Bitcoin’s (BTC) value has fallen -36.8% to about $23,684 since the deal was announced. This includes a recent rally from severe lows it hit in late June, but that is still well below what the parties expected.

The financial projections in VCV’s investor presentation accompanying the deal’s announcement were based on the assumption of BTC prices at $42,000. This was somewhat optimistic as it was 9.6% higher than BTC’s trading price even then at the time of the announcement. Nonetheless, VCV projected it would still turn $65.2 million in EBITDA in 2023E at BTC prices of $25,000 (about 5.7% higher than the current price).

But, the state of the market is likely enough to give the sellers misgivings as well. The five crypto companies that have completed de-SPACs – SAI, CORZ, BKKT, CIFR, and EQOS – closed Tuesday with an average price of $2.43 amid the downturn.

Fortune Rise has a transaction deadline on the horizon on November 5, 2022, but can extend three times for three months each in exchange for a contribution to its trust, which should give it enough time to complete a different deal.

 

Recent Posts
by Kristi Marvin on 2024-04-20 at 11:45am

Terms Tracker for the Week Ending April 19, 2024 Welcome to our weekly column where we discuss the findings from our IPO terms tracker based on the previous week’s pricings. Passover and school spring break starts next week, which most likely means a slowdown in SPAC filing activity. Although Churchill IX is now rumored to...

by Nicholas Alan Clayton on 2024-04-19 at 3:00pm

Despite a week of general pull-backs in the market, fintech firm Ibotta (NYSE:IBTA) nonetheless took the dive and had a good week debuting via a traditional IPO in the choppy waters. The company, which provides app-based consumer cashback discounts on purchases, priced its IPO at $88, above its proposed range of $76 to $84, and...

by Nicholas Alan Clayton on 2024-04-19 at 7:53am

At the SPAC of Dawn Happy Friday! SPACInsider has unveiled new presets on SPAC Performance accessible via the Data drop-down to easily sort for the highest and lowest performing active SPACs and de-SPACs. On the de-SPAC side, Vertiv (NYSE:VRT) continues to be well ahead of the pack, logging a 710% return by share price adjusted...

by Nicholas Alan Clayton on 2024-04-18 at 11:50am

AGBA (NASDAQ:AGBA) stock is up over +90% this morning following a +211% premarket spike on news it has signed a definitive agreement to combine with social streaming video platform Triller. AGBA, the company itself, was formed by the $555 million combination between a SPAC of the same name and TAG Companies, a financial services firm...

by Nicholas Alan Clayton on 2024-04-18 at 7:57am

At the SPAC of Dawn Since closing its combination with DHC last month, AI customer engagement firm BEN (NASDAQ:BNAI) has rolled out new partnerships with call center and healthcare clients. And, while it faces a fair bit of competition in the chatbot realm, several high-profile institutions have demonstrated that creating one that provides useful services...

logo

Copyright © 2023 SPACInsider, Inc. All Rights Reserved