The world of special purpose acquisition companies (SPACs) is about to get an exciting new member. Blank-check company Lionheart III Corp (NASDAQ:LION) is rising today as momentum builds for its merger with Australia-based security software solutions company Security Matters. LION stock surged earlier today and, although it has since lost some momentum, shares remain firmly in the green.
As of this writing, LION stock is up more than 10% for the day. Meanwhile, SMX — Security Matters’ stock ticker on the Australian Securities Exchange — is up 14%, having enjoyed a day of steady growth. Clearly, the market is eagerly anticipating the successful SPAC merger of this company.
Does this mean that LION will continue to rise as investors wait for further merger updates? Let’s take a closer look at the market today and assess the forces pushing up shares.
What’s Happening With LION Stock?
What’s important to remember is that Lionheart’s successful merger agreement isn’t breaking news. The SPAC announced the merger on Jan. 31, 2023 following a special meeting of shareholders. The company also submitted an 8K filing to the U.S. Securities and Exchange Commission (SEC) the day before. Later, on Feb. 1, LION stock ranked among the day’s top pre-market movers, rising 15%. This rally faded in the ensuing days, but now LION is rising steadily and investors seem excited for the finalization of the deal.
In the merger announcement, Lionheart III did not disclose any key dates for when the deal would progress. That begs the question of why both SMX and LION stock are surging today, weeks after the 8K filing and without a clear growth-driving catalyst.
LION’s volatility may be due to speculation revolving around its low market capitalization and low daily trading volume. Additionally, LION stock has been gaining momentum on Twitter alongside names like de-SPAC Ocean Biomedical (NASDAQ:OCEA). Like Security Matters, Ocean Biomedical recently announced that its merger with a SPAC had been approved as of a Feb. 3 meeting.
What’s obvious from this trend is that investor interest in de-SPACs is high now. Retail investors want to see these stocks keep rising and seem to believe they can. It’s unclear if this will continue, but the coming months may see some exciting market debuts if investor enthusiasm for SPACs continues to grow.
On the date of publication, Samuel O’Brient did not hold (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.
