Special Purpose Acquisition Companies (SPACs) have seen a brutal correction in recent months as investors steer clear of speculative growth stocks. At the same time, there have been concerns about high valuations as regulators scrutinize SPACs for fear that average investors could get burned.
Not long ago, many SPACs traded at substantial premiums, even before a merger was announced with a target company to be listed on the stock exchange. Some high profile SPACs have been trading at premiums ranging from 40% to 50% to the net asset value of $ 10 (NAV) and many have pulled back to get close to $ 10. The net asset value effectively serves as a floor for a SPAC that has not yet completed its merger as shareholders can redeem their shares for the net asset value at any time.
Here are 3 SPACs who have goals and stayed well above NAV during the SPAC downturn.
Churchill Capital Corp IV: Lucid Motors
One of the hottest SPACs is Churchill Capital IV (NYSE: CCIV), which is merging with emerging electric vehicle (EV) manufacturer Lucid Motors. While the stock has sold well from speculative highs of around $ 65, Churchill Capital IV stayed well above net asset value when compared to some other SPACs.
It’s worth noting that Churchill Capital IV’s situation is somewhat unique. Due to the surge fueled by rumors of the Lucid deal, the SPAC was able to get PIPE (Private Investment in Public Equity) investors to buy in at $ 15 instead of the typical $ 10. While stocks technically still carry the $ 10 NAV, the fact that institutional heavyweights have been willing to commit to $ 15 could provide additional support at these levels.
The most recent low was at $ 17.62.
ArcLight Clean Transition: Proterra
Another EV is SPAC ArcLight Clean Transition (NASDAQ: ACTC), which is listing electric bus operator Proterra to give the company $ 1.6 billion in enterprise value. Proterra is the leading provider of electric buses in North America and many cities and local governments are expected to continue to drive electrification of public transportation.
President Biden has announced plans to support the introduction of electric vehicles in a variety of ways. He recently made a virtual tour of a Proterra manufacturing facility earlier this week to learn more about the technology. The president’s infrastructure plan will include billions of dollars for electric school buses. Proterra has signed numerous counties to supply electric school buses, including the largest ever contract in the US for a county in Maryland.
ArcLight Clean Transition hit a low of $ 13.85 in early March.
Social Capital Hedosophia Holdings Corp V: SoFi
Announced in January, Chamath Palihapitiya Social capital Hedosophia V. (NYSE: IPOE) prepares to merge with fintech startup Social Finance, also known as SoFi. After a sexual harassment scandal a few years ago, SoFi ousted founder and former CEO Mike Cagney and guessed the former Goldman Sachs (NYSE: GS) banker and Twitter (NYSE: TWTR) COO Anthony Noto heads the company.
Since then, Noto has reformed its internal corporate culture while aggressively expanding into more financial products and services such as investing, crypto, and insurance. SoFi now has nearly 1.9 million unique members, and membership growth has accelerated over the past few quarters as brand awareness grows.
The stock’s most recent low was $ 13.14.
Where can you invest $ 500 now?
Before you buy Amazon, Netflix, or Apple, here are some things to consider …
The Motley Fool team initially recommended each of these stocks more than a dozen years ago!
- They discovered Netflix for $ 1.85 a share back when DVDs were mailed out.
- And recommended Amazon for $ 15.31 in 2002, before most people were familiar with online credit cards.
- And even Apple at $ 4.97 a share, roughly a month before the very first iPhone was released.
Check out where these stocks are today. Bottom line: Investing $ 500 in all three stocks would be worth more than $ 200,000 today!
And here’s why this matters: The Motley Fool’s flagship investment service Stock advisor just announced their Top 10 “Best Buys Now” around the world entire exchange. Whether you’re starting with $ 100, $ 500, or more, you’ll want to know all the details!
Click here to learn more