If you took a look at some of your SPAC stocks over the last week you may have noticed a trend happening and it’s not the up trend you were likely expecting! Now if your diversified in your SPAC investments your probably still doing ok as many are still performing very well! Also just because were seeing consolidation doesn’t mean there a bad investment either, none the less let’s review the worst performing SPACs followed by the best to see where we sit today!
The Worst Performing SPAC Stocks
To start it off as we just saw Hyliion NYSE: HYLN go through its merger acquisition getting listed on the NYSE but to everyone’s surprise it didn’t pull a Nikola and go to the moon instead we immediately saw a -45% pull back in the stock price. We were all expecting a rather nice pop in the stock but instead what we saw was a sell the news situation. With not enough traction from retail investors whether it be lack of promotion from the CEO or Robinhood investors just not seeing it as a shiny object like they did with the Nikola badger. No one knows for sure but as it consolidates this may be the opportunity, if you believe in the company long term to pick up some shares.
Now Social Capital Hedosophia Holdings Corp. III NYSE: IPOC has by far taken the worst hit down -20% caused from bad headlines, as there under fire for a possible breach of fiduciary duty and other violations of federal state laws in connection with a merger agreement. This is brutal for share holders because if it’s true may prevent any future mergers and could destroy the SPAC, if it’s false the stock recovers but for now we watch.
Landcadia Holdings II Stock NASDAQ: LCA Is the Golden Nugget online gaming spin off which as far as we tell is just pulling back with the consolidation of SPACs. Down -25% from it’s highs this also could be seen as a buying opportunity after seeing what happened to Draftkings on there merger. The Golden Nugget should be listing soon under the ticker GNOG stock, so keep an eye out for this one because hype will still likely follow.
Gores Metropoulos Ord Shs Class A NASDAQ: GMHI put this one on your Autonomous Driving Radar as it follows suit to a major sell off down -21%. This lidar company with its partnerships through companies like Volvo is some of the closest competing tech next to Tesla and Googles Waymo. Just like golden nugget it just seems to be consolidating before the merger and may be a great investment opportunity.
The Best Performing SPAC Stocks
At the top of the list for best performing SPACs this year we have to throw in one of our personal favourites being UTZ Brands NYSE: UTZ trading up 30% since it’s merger back in August. This snack company could be compared to a mini Pepsi type company with even the likes of Warren Buffett complimenting his daily use of there snack products. We will continue to monitor this stocks earnings as it’s one of the few mergers to come with a dividend!
Spartan Energy NYSE: SPAQ another popular electric vehicle spin off with Fisker motors still attracting hype to the stock price only trading down -15% from it’s all time highs. Fisker may be able to attract more attention to retail investors being in the consumer vehicle space similar to Nikola. This may be one of the reason we are seeing a larger pull back in Hyliion as Transport trucks are not seen as a sexy enough market.
We also saw Social Capital Hedosophia Hldgs II Corp NYSE: IPOB trading up a massive 61% being the best performer of the bunch in the short term! This company has yet to merge and is disrupting the Realtor market in housing!
Virgin Galactic Holdings Inc NYSE: SPCE let us remind you that yes this space company was once a SPAC stock and today though is trending sideways is still up 180% from its announced merger date. We think SPCE is over valued but all start ups are, Being one of the only 3 players in commercial space flight sector with Tesla and Blue Origin it has plenty of potential to see further stock rallies as it grows over time!
SPAC Stock Sell Off In Conclusion
We all saw the SPAC stock hype coming and this just may be a regular consolidation period in the sector, as this sell off doesn’t directly reflect the underlaying value of the companies themselves. Considering UTZ was still able to pull off a successful merger into stock growth and Hyliion wasn’t doesn’t mean Hyliion is out of future potential.
If you have ever been interested in these companies this may be your opportunity to get discounts on your favourite SPACs! We always recommend choosing the best management teams and diversifying into multiple SPACs, which helps prevent problems that arise like with IPOC!