Morning Roundup: November 15, 2023
by Marlena Haddad on 2023-11-15 at 7:52am

At the SPAC of Dawn

As if there were any doubts, Digital World (NASDAQ:DWAC) remains the champion on retail buzz investing among SPACs.

Although the SPAC did not jump as dramatically yesterday on the filing of its amended S-4 as many de-SPACs did on the inflation numbers, it nonetheless locked in a +2.9% gain and is up a further +2.3% in the pre-market today to $15.98.

This is naturally the highest price of any pre-close SPAC at the moment, and all other SPACs with announced deals trading significantly above their trust values at the moment are those very near close with small numbers of shares left after redemptions. Digital World’s lofty performance also came despite a a fair amount of negative press reacting to the S-4 drop.

A number of publications inaccurately reported that Digital World’s target Trump Media & Technology Group has lost -$73 million since inception, which may have come from a simple misreading of this table in the filing. As SPACInsider noted yesterday, the true number is a -$30.9 million loss from operations in full year 2022 and the first half of 2023 or a net loss of -$31 million since its inception in February 2021, if one wants to include the swings in the fair value of its derivative liabilities as well.

It appears only Reuters has corrected this, but one can find plenty more headlines with -$73 million still floating through the internets. So, was retail trading on the accurate number, the inaccurate number, or does it matter?

One can hardly make a case that Digital World has been rationally traded ever since tipping its bid to take public the nascent media arm of the political movement around former President Donald Trump. It has twice hit peaks above $100 and is clearly now trading far below that as time as dragged on.

But, assuming that enthusiasm for this project among retail traders would only increase once the deal closes, it remains to be seen who is making the bad bet.


News and Rumors

  • Bloomberg: Argentine low-cost airline Flybondi is considering an expansion into Brazil, a move that could eventually be financed through public markets once it completes a merger with Integral Acquisition Corporation 1 (NASDAQ:INTE) in the first half of next year.

  • Music Business Worldwide: An unnamed SPAC is rumored to be pursuing music rights organization BMI, valuing it at 15x its $145 million EBITDA, or about $2.2 billion.

  • Bloomberg Law: SPACs have faced plenty of lawsuits for doing deals that investors later soured on, but now the sponsors of TCW face a Delaware suit for not proceeding with a deal it had close to hand. The potential deal was never announced and TCW liquidated early in December 2022.

Liquidations and Reversals

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