In a potentially game-changing merger, online behavioral therapy provider Talkspace is going public via special purpose acquisition company (SPAC) Hudson Executive Investment (NASDAQ:HEC). Knowing this, you might want to start accumulating shares of HEC stock.
There are plenty of SPAC stocks out there to invest in. However, Hudson is different because it’s not another hype-fueled SPAC stock, like some of the electric-vehicle SPACs have turned out to be.
Rather, it involves a company that’s designed to address a largely under-addressed need in the behavioral health space. Therefore, this SPAC is special because it could really change the world for the better.
But will HEC stock be profitable for investors? That’s the billion-dollar question. So let’s start off with a glance at where the stock has been and, if you don’t mind a bit of predicting, where it may be headed.
A Closer Look at HEC Stock
When shell companies like Hudson Executive Investment are still in the pre-deal phase, it’s fairly normal for their share prices to stay close to the $10 level.
Thus, HEC stock didn’t stray very far from $10 for several consecutive months in 2020. That changed in December, when Hudson’s share price gradually started to ascend.
That upward trajectory persisted into the first three weeks of 2021. By Jan. 22, HEC stock had already reached $11.90. OK, so you might have seen SPAC stocks move faster than that.
Nevertheless, the bulls are firmly in control of Hudson’s shares for the time being. The bulls’ next targets should be $15 and then $18 as anticipation over the merger builds.
By the way, the owners of Hudson’s shares should prepare for a major change. Specifically, Talkspace will trade on the Nasdaq Exchange once the merger has officially been finalized. Furthermore, the name’s new ticker symbol will be TALK.
Let’s Talk About the Merger
People sometimes refer to billion-dollar start-up companies as unicorns. As Talkspace prepares to go public, it belongs in unicorn territory, as its SPAC deal is worth $1.4 billion.
As for the shell company, Hudson Executive Investment, it’s backed by Doug Braunstein. That company went public in June 2020.
The merger deal includes $300 million worth of private investments. Among the major investing firms are Woodline Partners, Deerfield and Jennison Associates.
The owners of HEC stock should be glad to know that, as a result of the SPAC merger, Talkspace will have access to $250 million that it can use to focus on growing its business.
While not every trader is aware of the merger with Talkspace, it’s a high-dollar event that has attracted the attention of some serious investors.
Moreover, what separates this SPAC from some others is that it involves a company that has already been growing its business for nearly a decade. So, with HEC stock you’re not just investing in a brand-new company and hoping for the best.
A Business Worth Growing
Talkspace has been in existence since 2012 and bills itself as the leading digital and virtual behavioral health-care company. Evidence of this comes from the fact that Talkspace already has approximately 46,000 active members.
The company also claims to have more than 39 million people “covered by employer or healthcare insurance agreements.” And to give you an idea of Talkspace’s financial outlook, the company’s estimated net revenues for 2021 will be $125 million.
That’s an improvement of roughly 69% over Talkspace’s 2020 estimated net revenues. So clearly, the company is growing in more ways than one.
Besides, it is addressing an urgent need in a high-growth field. According to Talkspace, it’s estimated that over 70 million people suffer from some form of mental illness.
And unfortunately, less than half of the people suffering from a behavioral illness are treated due to cost, lack of access or stigma. This is an unacceptable situation, and Talkspace can provide therapy services to some of these individuals.
The Bottom Line
As we’ve learned, HEC stock is working its way up to new heights as the investing community discovers this unusual SPAC stock.
Now you know about the merger deal and how much it’s worth. If you believe in the future of the e-therapy market, then HEC stock should definitely be on your radar.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.