7 SPACs to Watch After Donald Trump Made Mergers ‘Great Again’

SPACs to watch - 7 SPACs to Watch After Donald Trump Made Mergers ‘Great Again’

Source: iQoncept/ShutterStock.com

In the last few weeks, former President Donald Trump has breathed new life into the world of special purpose acquisition companies. This follows a period of waning interest — and of new focus on the risks present in SPAC mergers. However, it seems that Trump reminded investors just how profitable SPAC stocks can be. After announcing that his Trump Media and Technology Group (TMTG) will come public through Digital World Acquisition (NASDAQ:DWAC), DWAC stock reached unimaginable highs. Trump represents the power a single celebrity backer can have in this space. With that in mind, there are a few other high-profile SPACs to watch.

Some of these names are closely related to DWAC, like acquisition companies with ties to its CEO, Patrick Orlando. According to Matthew Tuttle, CEO and CIO of Tuttle Capital Management, this recent price action speaks to the role of investing influencers in SPACs.

“What Trump has done is he’s made SPACs great again,” says Tuttle, an expert in the field. Tuttle notes that Trump’s announcement has turbocharged the stock market, generating increased interest in SPACs.

Clearly, investors are keen on DWAC stock because of its ties to Trump. But what about other SPACs with celebrities at the helm? How can investors consider those opportunities?

According to Tuttle, the actual management team, and not the celebrities, are often more important. “If the famous names aren’t bringing anything to the table, we kind of look through them and just ignore the fact that they’re there,” he says.

So what are a few SPACs to watch that feature meaningful celebrity affiliations? Here are seven top names:

  1. Digital World Acquisition (NASDAQ:DWAC)
  2. Benessere Capital Acquisition (NASDAQ:BENE)
  3. Social Capital Hedosophia VI (NYSE:IPOF)
  4. Pershing Square Tontine Holdings (NYSE:PSTH)
  5. Forest Road Acquisition II (NYSE:FRXB)
  6. Slam Corp (NASDAQ:SLAM)
  7. Dune Acquisition (NASDAQ:DUNE)

SPACs to Watch: Digital World Acquisition (DWAC)

A close-up shot of Donald Trump behind a microphone with one arm outstretched.

Source: Joseph Sohm / Shutterstock.com

Trump, Tuttle says, is an example of a founder who does bring something to the table.

If his firm was considering buying into DWAC, he hypothesizes, “Trump would be an integral part of our analysis.” Why? Trump’s influence in the United States gives him a unique ability to build a social network that could compete with Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR).

“He’s the only guy who could pull it off,” Tuttle said. That is why, in the specific case of Digital World Acquisition and DWAC stock, Trump’s role is hard for Tuttle to ignore.

So what comes next? Although DWAC was picked by many as the next meme stock, shares have been cooling down since their early explosion. Put another way, although the stock has still returned nearly 500% year to date, its current price near $58 is a far cry from its 52-week high near $175.

Benessere Capital Acquisition (BENE)

Photo of Donald Trump standing at a podium with the American flag in the background

Source: Andrew Cline / Shutterstock.com

As previously noted, Benessere Capital is one of the SPACs that rode DWAC’s wave higher in the days following the TMTG merger announcement.

Although not immediate, investors were quick to latch onto BENE as a worthwhile investment. It seems the intrigue rests in Patrick Orlando, who serves as the CEO of Digital World Acquisition. After a few years working for Deutsche Bank (NYSE:DB), Orlando now has his fingers in many SPAC pies.

It’s also worth noting that this SPAC has no actual celebrities behind it, and is instead run by business professionals. Benessere was created with the goal of acquiring a middle-market technology business in the Americas. Can the mystery of Orlando and DWAC keep gains coming for BENE stock?

Although this name belongs on any list of SPACs to watch now, investors should be careful. After popping higher, shares are down roughly 50% from their 52-week highs.

SPACs to Watch: Social Capital Hedosophia VI (IPOF)

SPACs join company on puzzle pieces and handshake, 3d render

Source: NESPIX / Shutterstock.com

You can’t analyze SPACs without mentioning Chamath Palihapitiya.

An early member of Facebook’s leadership team, Palihapitiya has become a leader in venture capital, and particularly, in SPACs. Since the early days of the SPAC boom, he has been responsible for taking high-profile and innovative names public through Social Capital Hedosophia. Perhaps most notable is Virgin Galactic (NYSE:SPCE), his first deal to close.

Since then, he has brought Clover Health (NASDAQ:CLOV), SoFi (NASDAQ:SOFI) and Opendoor (NASDAQ:OPEN) to market.

Palihapitiya isn’t done, either. His IPOF, as well as his fourth blank-check company, Social Capital Hedosophia IV (NYSE:IPOD), remain hunting for merger targets in the tech realm. Because of his track record, bold vision, and engagement with retail investors, IPOD and IPOF receive a great deal of scrutiny. In fact, this week has seen IPOF pop on rumors of a pending merger with Discord.

Considering all this, IPOF certainly belongs on a list of SPACs to watch.

Pershing Square Tontine Holdings (PSTH)

A Pershing Square sign on a cement wall.

Source: Shutterstock

Another noted name in the world of SPACs is Bill Ackman. The founder and CEO of hedge fund Pershing Square Capital Management enjoyed years of success before he ventured into the SPAC game.

According to Ackman himself, this SPAC was formed with the goal of targeting “mature unicorns.” This mindset makes sense. Some stocks don’t do well post-merger because they were not mature enough to succeed in public trading. It’s also worth noting that the term unicorn refers to startups valued at over $1 billion. While Ackman may have his work cut out for him, he seems to know what he’s doing.

“When it comes to SPAC stocks, PTSH is just a little different than the rest,” states InvestorPlace contributor Mark Hake.

That’s true for a number of reason, especially since Ackman is currently in the process of converting PSTH stock to a special purpose acquisition right company (SPARC) through liquidation. This deal is under no time limit, though, as Hake also notes. This means that until everything is finalized, PSTH stock will continue trading as is.

Although PSTH is down 15% over the last six months, the allure of the SPARC and Ackman’s leadership make it a SPAC to watch.

SPACs to Watch: Forest Road Acquisition II (FRXB)

A close-up shot of Shaquille O'Neal in front of a blue background.

Source: Ron Adar / Shutterstock.com

This name started making headlines when its predecessor Forest Road Acquisition I took Beachbody (NYSE:BODY) public earlier this year. The success of the early summer merger was promptly followed with the launch of another SPAC, this time targeting companies in the telecommunications, media & technology sector.

The team behind this SPAC includes former NBA star Shaquille O’Neal as a strategic advisor. Other notable names include human rights activist Martin Luther King III, serving as an independent director, and Kevin Mayer, a former Disney (NYSE:DIS) executive. Mayer and Tom Staggs, another former Disney exec, currently serve as co-CEOs of the company.

Although the stock is down today from its debut price, the announcement of a merger partner could take it higher. Plus, this SPAC doesn’t receive as much media coverage as others, even with its celebrity affiliation. The first success of its team should have investors hopeful for a repeat.

Slam Corp (SLAM)

A close-up shot of Alex Rodriguez against a pink background.

Source: lev radin / Shutterstock.com

A trading symbol name like SLAM might not necessarily call to mind positive images. That is, until you realize who it was founded by.

Since his retirement from professional baseball in 2016, former New York Yankees star Alex Rodriguez, often known as A-Rod, has focused on the business world. His partner in this venture is Himanshu Gulati, a financial sector veteran who serves as CIO of Antara Capital.

According to its website, Slam Corp is on a mission to acquire “an established leader in the sports, media, entertainment, or health and wellness sectors” that brings “compelling technology” to the table. February 2021 saw the SPAC file for a $500 million IPO.

Rodriguez is an interesting choice for a celebrity SPAC partner. Despite years of being one of his sport’s highest-paid athletes, he drew plenty of controversy. By the time he retired, his image was tarnished by ego-related incidents. SLAM is still waiting for a target, and hasn’t seen much growth since its IPO.

For investors, this SPAC is one to watch, especially as we wait and see what impact Rodriguez’s fame will have on SLAM.

SPACs to Watch: Dune Acquisition (DUNE)

A close-up shot of Steph and Ayesha Curry in front of a Nickelodeon background.

Source: Tinseltown / Shutterstock.com

Some SPACs may not necessarily have a celebrity founder, but they may have someone at the helm that’s close to celebrities.

Dune’s director Jeron Smith first rose to prominence as the mind behind NBA star Steph Curry’s Unanimous Media. While it has been reported that Curry is part of this SPAC’s team, he isn’t listed as an official member of the board. As Sports Illustrated reported in 2019, though, Smith is responsible for much of Curry’s success off the court. And Smith’s experience doesn’t stop there. His resume also includes working on the White House’s digital team under former President Barack Obama.

With this type of experience, it’s no wonder that Dune makes most lists of SPACs to watch (including this one from InvestorPlace Markets Analyst Joanna Makris). Shares today are near their 6-month highs.

As it turns out, there’s an extra good reason why. Earlier this month, Dune released a statement announcing its plans to merge with next-generation trading platform TradeZero. The new company will trade on the Nasdaq under the symbol TRAD.

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.


Article printed from InvestorPlace Media, https://investorplace.com/2021/11/7-spacs-to-watch-after-donald-trump-made-mergers-great-again-dwac-stock/.

©2022 InvestorPlace Media, LLC