Sept. 3 marked the close of an agreement between quantum encryption technology producer Arqit Quantum (NASDAQ:ARQQ) and blank-check company Centricus Acquisition Corporation. ARRQ stock began trading yesterday and it didn’t take long for shares to start rising.
What Happened With ARQQ Stock?
After flatlining for almost the entire summer of 2021 between $9 and $10 per share, Centricus stock dipped on Sept. 2 prior to the close of the deal. During the first week of September, though, it has skyrocketed by more than 66% from its lowest dip of $8.35 to $16.72.
It began the day by climbing more than 48%, and despite some rising and falling since, as of this writing it is up 24% on the day.
Previously, the stock closed out its first day trading on the Nasdaq at $11.30 per share, a 35.33% gain for the day.
Why It Matters
AARQ’s impressive debut is worth noting, in part because it is in keeping with companies such as eFFECTOR Therapeutics (NASDAQ:EFTR), another SPAC that made its public debut recently and saw considerable gains yesterday. As of this writing, shares have risen over 108% on the day.
2021 began with a frenzy of companies rushing to market by merging with blank-check companies. While this SPAC bubble piqued considerable interest from investors, analysts predicted that the trend would likely be short term.
The most recent season has proven to be one of turbulence for newly merged and public SPACs. Two members of that group have proven volatile recently, leaving analysts to continue pondering the sustainability of the SPAC tend. While Lucid Motors (NASDAQ:LCID) has enjoyed impressive gains over the past five days, shares are down by 3.7% today as of this writing. Shares of Hippo Holdings (NYSE:HIPO) also spent the past few days rising after a rocky previous week, though today has been turbulent with shares up just 5.36% from where they were earlier.
What Comes Next for ARQQ Stock?
While ARQQ stock is off to a good start, it is not uncommon for SPACs to enjoy a strong debut but quickly begin sinking. Both Lucid and Hippo saw significant declines when their PIPE (private investors in public equity) took the first opportunity to offload shares.
AARQ stock will be interesting to monitor. While it does not have the media attention that Lucid has always enjoyed, it does have a product with the potential to fill an important demand. In a statement released prior to the merger, the company described its software as “the most important cyber security technology of the era.”
In an era where data privacy is of an increasing important across all sectors and the demand for encryption software is not likely to slow down, the market could be ripe for exactly such a product.
While the long-term future of this SPAC remains uncertain, gains in the short term are likely.
On the date of publication, Samuel O’Brient 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.
