US SPAC TEMPERATURE CHECKAug 17, 2020www.spacalpha.com
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3 KEY QUESTIONS FOR OUR ANALYSIS
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1. How hot is the SPAC IPO environment?
2. How are recent SPAC IPOs trading?
3. How are SPACs with announced deals trading?
YTD 2020 SPAC IPOs: WEEKLY ACTIVITY
4Data source: SPAC Research
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
Value 0.0 0.0 0.0 0.7 0.0 0.2 1.7 0.4 0.0 0.8 0.2 0.0 0.0 0.0 0.0 0.0 1.3 0.9 0.6 1.0 0.6 1.0 0.2 0.4 0.5 0.6 1.2 0.1 1.7 5.0 3.7 2.7 1.9
SPAC IPOs Proceeds by Week, 2020, $ billions
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
Count 0 0 0 2 0 1 5 2 0 2 1 0 0 0 0 0 3 3 3 3 2 1 2 1 1 3 3 1 6 5 5 9 6
SPAC IPOs Priced by Week, 2020
YTD Aug 14, 2020
Week
Week
Jan Feb Mar Apr May Jun Jul Aug
Jan Feb Mar Apr May Jun Jul Aug
UNIT PRICE PERFORMANCE:CLASS OF 2020 SPACs WITHOUT ANNOUNCED IBCs
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$9.00
$10.00
$11.00
$12.00
$13.00
$14.00
$15.00
31-Dec 30-Jan 29-Feb 30-Mar 29-Apr 29-May 28-Jun 28-Jul 27-Aug
Data source: SPAC Research
As of Aug 14, 2020
Date of SPAC IPO
TOP 10 SPAC UNIT PRICESCLASS OF 2020 SPACs WITHOUT ANNOUNCED IBCs
6Data source: SPAC Research
As of Aug 14, 2020
Name TickerIPO Size,
$MIPO Unit Focus Sponsor(s) Underwriters Date
Closing
Price, $
Research Alliance I RACA $138No warrants,
24 monthsBiotech RA Capital Jefferies 8-Jul $14.06
Social Capital Hedosophia II
IPOB.U $414S+W/3,
24 monthsTech, US
Social Capital, Hedosophia
CS 28-Apr $11.88
Flying Eagle Acquisition
EAGL6 $690S+W/4,
24 monthsGeneral 5 Eagle SPACs GS, DB 6-Mar $11.70
Panacea Acquisition PANA.U $144S+W/3,
24 monthsBiotech EcoR1 Capital Cowen 1-Jul $11.47
Social Capital Hedosophia III
IPOC.U $828S+W/3,
24 monthsTech, ex-US
Social Capital, Hedosophia
CS 22-Apr $11.41
Health Sciences Acquisitions 2
HSAQU $160No warrants,
24 monthsBiotech, Med
Devices2nd RTW SPAC
Chardan, Barclays
4-Aug $11.40
Gores Holdings IV GHIVU $425S+W/4,
24 monthsGeneral 4 Gores SPACs DB, MS 24-Jan $11.00
DFP Healthcare Acquisitions
DFPHU $230S+W/4,
24 monthsHealthcare
2nd Deerfield SPAC
DB, Jefferies, UBS
11-Mar $10.95
Foley TrasimeneAcquisition
WPF.U $1,035S+W/3,
24 monthsFinTech, BPO
2nd SPAC for Foley & TH Lee
CS, BofA 27-May $10.91
Jaws Acquisition JWS.U $690S+W/3,
24 monthsNo real estate
or energyBarry
SternlichtCS, MS, Citi 14-May $10.85
BOTTOM 10 SPAC UNIT PRICESCLASS OF 2020 SPACs WITHOUT ANNOUNCED IBCs
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Name TickerIPO Size,
$MIPO Unit Focus Sponsor(s) Underwriters Date
Closing
Price, $
GreenroseAcquisition
GNRSU $173S+W,
18 monthsCannabis
1st time SPAC team
Imperial, I-Bankers
11-Feb $9.97
YunhongInternational
ZGYHU $69S+W/2+S/10,
12 months
Asia (ex-China)
1st time SPAC team
Maxim 13-Feb $9.98
Malacca Straits Acquisition
MLACU $144S+W/2,
18 monthsSoutheast
Asia1st time
SPAC teamBTIG,
I-Bankers15-Jul $9.95
Property Solutions Acquisition
PSACU $230S+W,
21 monthsReal estate
services1st time
SPAC team
EarlyBird,I-Bankers, Ladenburg
22-Jul $9.95
East Resources Acquisition
ERESU $300S+W/2,
24 monthsEnergy
1st time SPAC team
Wells Fargo 23-Jul $9.98
Greencity Acquisition GRCYU $40S+W/2,
12 monthsAsia (China)
1st time SPAC team
Ladenburg Thalmann
24-Jul $9.97
NewHold Investment NHICU $150S+W/2,
24 monthsIndustrials
ex-CEO of 3 Hennessy SPACs
Stifel,I-Bankers
31-Jul $9.96
Kismet Acquisition I KSMTU $250S+W/2,
24 monthsRussia
1st time SPAC team
CS, BofA 6-Aug $10.00
Vistas Media Acquisition
VMACU $100S+3/4W,
12 monthsMedia
Ex-CEO of 2 India SPACs
I-Bankers, EarlyBird,
Ingalls, B Riley7-Aug $9.97
Lionheart Acquisition II
LCAPU $200 S+W/2Real estate
servicesAcquired Opes
SPACNomura, Cantor
14-Aug $9.97
Data source: SPAC Research
As of Aug 14, 2020
KEY INSIGHTS
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As of Aug 14, 2020
• Heightened IPO activity in the first two weeks of August as the traditional pre-Labor Day slowdown looms – 25 IPOs in last 4 weeks compared with 13 IPOs in the prior 4 weeks
• Expect to see ~10 IPOs priced in next 3 weeks until Labor Day, which may result in ~15-20 pricings in the 3 weeks of Sep.
• Price performance of Class of 2020 SPACs is robust with many SPAC units trading above $11.00 without having announced IBCs
• Top performing SPACs have the following features:• 40% of the top 10: healthcare focus• 40% of the top 10: TMT focus• 60% are experienced SPAC teams and/or have institutional investor support• No “negative” focus areas such as Asia/Energy/Cannabis/Real Estate• Low warrant coverage, full 24 month tenor
• Bottom performing SPACs (as noted in our June 1, 2020 SPAC Primer analysis) have either one or many of these features:• Asia/Eastern Europe focus• Energy/Cannabis/Real Estate focus• First-time teams• High warrant coverage, inclusion of rights, 12-18 month tenors• Size of the IPO was not a predictive variable: 60% of the laggard IPOs > $150M
UNIT PRICE PERFORMANCE:ALL SPACs WITH LIVE IBCs
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$10.00
$12.00
$14.00
$16.00
$18.00
$20.00
$22.00
$24.00
$26.00
16-Dec-16 13-Aug-17 10-Apr-18 6-Dec-18 3-Aug-19 30-Mar-20 25-Nov-20
Data source: SPAC Research
As of Aug 14, 2020
Date of SPAC IPO
TOP 10 LIVE SPAC DEALSBy Common Stock Prices
10Data source: SPAC Research
As of Aug 14, 2020
Name Ticker IPO Date Deadline Target Sector EV, $MClosing
Price, $
Tortoise Acquisition SHLL.U 28-Feb-19 4-Mar-21 Hyliion Electric Auto $1,097 $24.45
Graf Industrial GRAF.U 16-Oct-18 31-Oct-20 Velodyne Industrial Tech $1,566 $17.65
Forum Merger II FMCIU 3-Aug-18 30-Sep-20Ittella / Tatooed
ChefPackaged Food $482 $15.40
Collier Creek Holdings CCH.U 5-Oct-18 9-Oct-20 UtzPackaged
Food$1,560 $13.71
Landcadia Holdings II LCAH2 7-May-19 9-May-21Golden Nugget Online Gaming
Online Gaming $745 $12.99
DiamondPeakHoldings
DPHC.U 28-Feb-19 4-Mar-21Lordstown
MotorsElectric Auto $965 $12.97
Opes Acquisition OPESU 14-Mar-18 16-Sep-20 BurgerFi Restaurants $143 $12.21
Spartan Energy Acquisition
SPAQ.U 10-Aug-18 14-Feb-21 Fisker Electric Auto $1,900 $12.20
Fortress Value Acquisition
FVAC.U 30-Apr-20 4-May-22 MP Materials Mining $1,000 $12.17
Insurance Acquisition INSUU 20-Mar-19 22-Sep-20Shift
TechnologiesAuto B2C
e-commerce$416 $11.44
KEY INSIGHTS
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As of Aug 14, 2020
• The frothy June-July market associated with 30-70% price increases on transaction announcement has settled down to a more sensible investment environment
• There are clear signs of “clustering” in SPAC deal making with several deals being announced in sectors where initial deals have performed well:
• Gaming: after DKNG, we have Golden Nugget Online Gaming and Rush Street Interactive• Auto: after NKLA, we have Hyliion, Velodyne Lidar, Lordstown, Fisker (and, per rumors,
Canoo)• Food: after TWNK/SMPL, we have Utz, Ittella, BurgerFi• The electric auto space seems crowded with lofty 3-5 year forward revenue multiples built
on assumptions of hockey stick growth in manufacturing unhindered by competition – we expect to see some of these companies trade weakly as investors cycle their money to value/safe haven plays.
• Top performing deals, with the exception of Opes/BurgerFi, have EVs north of $400 million
• Sep-Oct timeframe should see several IBC closings since SPAC sponsors will seek to de-risk their transactions ahead of the US Election calendar
• Combined with the active IPO calendar, we expect to witness heavy cycling of investor capital out of SPACs where prices have run up significantly as investors go risk off positioning into year end into the (relatively) safe haven of new SPAC IPOs
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