Why these 3 SPAC IPOs are collapsing today

what happened

Yesterday was a pretty good day for investors in unproven specialty venture capital (SPAC) shares, designed to acquire real-world companies and then bring it through a reverse merger exchange. But today is a little different.

From 13:50 EST, shares of Bridgetown Holdings Limited (NASDAQ: BTWN) is 7.2% lower, Longview Acquisition Corp. (NYSE: LGVW) decreased by 8.3%, and Tuscan Holdings Corp. (NASDAQ: THCB) performs the worst of all – drops even by 10%.

3 colorful arrows pointing all the way down

Image Source: Getty Images.


Disturbing for investors who have sunk their money into these stocks with a mere check, there is no current news behind the stock price changes in one of these three names. No SEC filing was filed, no analyst reports were written, and none of the three companies published any press releases of their own value. If there is no real ‘news’, today I just want to do a quick overview of what these companies are and what they plan to do.

Tuscan Holdings announced in early November that it needs to combine a company with next-generation battery technologies and a new company Fiatpartner Microvast Inc. Tuscan noted at the time that Microvast battery technology was already installed in more than 28,000 vehicles worldwide, and that the company would make more than $ 100 million in sales this year. Not typical of a SPAC company, Tuscan did not try to predict what valuation Microvast would make public – or even mentioned a closing date for the deal.

Just a week later, Longview Acquisition announced its own IPO plans, saying it would acquire and bring the public and the Bill and Melinda Gates Foundation-backed medical imaging company Butterfly Network, which has an ultrasound converter that he says is a will do ‘whole body image’. with a single hand probe using semiconductor technology. “Longview promises a $ 1.5 billion pro forma venture value for the combined company as soon as it is announced sometime in the first quarter of 2021.

Bridgetown Holdings is a little different. Although Bridgetown conducted its own IPO in October, promising investors that they would like to acquire a technology, financial services or media company in Southeast Asia and try to bring it into a reverse merger exchange, Bridgetown should not have a does not give actual announcement. object of its affection. Two weeks ago, Barron’s reports that Bridgetown wants to acquire the Indonesian e-commerce company Tokopedia, but no agreement has been announced yet. At the moment, Bridgetown Holdings remains a buyer looking for a seller.

Now what

And yet, if you noticed, Bridgetown shares are currently selling for almost $ 16 a share, up nearly 60% from just two months ago. Say what you want Tuscan Holdings to trade today at more than $ 17 per share, and therefore 70% higher than the IPO price, or Longview trades north of $ 20 per share – a clean double amount. At least these two SPACs have real, identifiable businesses that they intend to bring to the public.

However, two months after its search for an acquisition began, Bridgetown still has nothing to offer its investors – which raises the question of why investors are willing to pay a 60% premium for a piece. of that nothing to own?

Judging by today’s price action, it seems that more than a few investors in Bridgetown are starting to wonder about it themselves.