Shares of Freightos (NASDAQ:CRGO) rose as much as 30% following the company’s successful completion of a special purpose acquisition company (SPAC) merger.
The company, which is based in the Cayman Islands but operated out of Jerusalem, Israel, runs an online marketplace for booking and payments related to international freight shipments. The firm was reportedly given a $500 million valuation as part of its merger with a SPAC and debut on the Nasdaq exchange.
Freightos is one of the few high-profile SPAC deals to be completed in recent months after the market slowed dramatically throughout 2022 amid a broad-based downturn in equity issuance.
What Happened With CRGO Stock
Freightos merged with Denver-based Gesher Acquisition Corp. to complete its SPAC listing. The company raised $80 million via the public listing. However, CRGO stock has shot up sharply in price on its market debut, rising to as much as $17.25 per share. The stock was originally priced at $10 per share.
Freightos, which says its aim is to make booking large freight shipments as easy as booking an airline flight, had raised $118 million prior to its market debut. Early investors in the company include Qatar Airways, FedEx (NYSE:FDX), the Singapore Stock Exchange and the American-Israeli venture capital firm Aleph.
Freightos reported 2022 revenue of $20 million, but says it expects bookings this year to be over $1 billion.
Why It Matters
The market for both initial public offerings (IPOs) and SPACs fell off a cliff in 2022 after racking up record sums during the pandemic when equity markets were booming. According to accounting firm Ernst & Young’s IPO report published in December, deal proceeds from initial public offerings plunged 94% in 2022, falling to $8.6 billion from $155.8 billion in 2021. The SPAC market fared even worse last year.
That Freightos has been able to stage a successful SPAC merger provides an encouraging sign that the market for new stock issuance might be starting to improve. While equity markets remain volatile, there are signs emerging that both institutional and retail investors are wading back into stocks after sitting on the sidelines for much of last year.
What’s Next for CRGO Stock
We’ll see if CRGO can maintain its momentum and if the share price continues to climb in the coming days and weeks. Many previous SPAC deals resulted in strong debuts that later fizzled. Freightos will be looking to buck that trend as we head into a new year.
On the date of publication, Joel Baglole 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.