Locust Walk Acquisition (NASDAQ:LWAC) stock is rocketing higher on Wednesday following news that it can move forward with the eFFECTOR Therapeutics.
A special meeting of shareholders was held by Locust Walk Acquisition yesterday to vote on the special purpose acquisition company (SPAC) merger with eFFECTOR Therapeutics. That vote saw 93.2% of votes in favor of the merger, with 71.7% of all outstanding shares of LWAC stock voting.
Thanks to this approval from shareholders, LWAC and eFFECTOR Therapeutics are set to complete the merger as soon as today. The goal of the company is to have it complete so it can start trading post-merger tomorrow.
When the combined company does start trading, it will do so under the eFFECTOR Therapeutics name. This will also see shares of LWAC stock change over to the new EFTR ticker, with warrants trading under the EFTRW ticker.
The combined company will start off with $53.5 million of net cash available to it. This comes from $65.9 million of total cash proceeds from the deal. That’s lower than the $100 million that eFFECTOR Therapeutics was seeking from the SPAC merger, but it waived that requirement.
EFFECTOR Therapeutics is a clinical-stage biopharmaceutical company focused on a new class of oncology drugs. The company expects to use funds from the SPAC merger to continue its clinical trials of treatments in development.
LWAC is experiencing heavy trading on today’s merger news. That has some 5 million shares on the move as of this writing. For comparison, its daily average trading volume is only about 130,000 shares.
LWAC stock was up 159.6% as of Wednesday afternoon.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.