Anticipated to Price IPO Tonight.

Novus Capital Corp. (NOVSU), filed an amended S-1 this morning, further revising the terms of their IPO.  In Novus Capital’s initial filing, this was a 1/2 warrant, 24 months deal.  Subsequent to that, those terms were revised to 21 months and 3/4 of a warrant.  As of this morning, NOVSU is now 18 months with a full warrant included in it’s unit.

To add additional fuel to the terms fire, GigCapital3 (GIK.U) debuted today and even though Gig3 IPO’d with $10.10 in trust, 3/4 of a warrant and 18 months, it still opened at $9.90. This is in stark contrast to Jaws Acquisition Corp (JWS.U), which also debuted today, and is currently trading at $10.15.

It begs the question…do investors only want to buy the tier-1, brand name IPOs?  Social Capital II is currently trading at $10.52, Social Capital III, at $10.39. CC Neuberger, at $10.14, and Jaws at $10.15.  These are all high-profile SPACs, led by well known names, and as you can see below, these are the only SPACs to be trading significantly above $10.00 (of the SPACs that have IPO’d since the Covid-19 crisis).  Furthermore, Jaws did not need to revise its terms at all.

It’s a big signal when Gig3 overfunds its trust at $10.10 and it still can’t trade above issue price at IPO. And that’s a big problem for the rest of the sub-elite SPACs looking to IPO going forward because now it’s going to be even more challenging to get enough indications to cover a book.

So as was previously theorized, there appears to be a Darwinian “Survival of the Fittest” happening where only the elite deals are able to IPO.  That’s not to say we’re totally there yet, but there’s going to be a lot riding on Novus Capital’s day-one performance tomorrow. If Novus breaks issue price too, it will get increasingly harder for the rest of the field to get the indications they need when investors can just buy in the secondary market below $10.00.

Let’s see what happens.

Revised summary of terms below: