Mount Rainier Acquisition Corp. (NASDAQ:RNER), a special-purpose acquisition company (SPAC), jumped 41% in early trading. RNER stock sank 44% yesterday, and the SPAC is trending on social media. After the morning’s high, RNER stock has since receded to just 4% up and appears to still be trending downwards.
According to a Jan. 26 announcement by Israel-based HUB Cyber Security, Mount Rainier was supposed to merge yesterday with Israel-based HUB.
However, Rainier’s shareholders voted yesterday to delay the transaction by delaying the vote to today, Feb. 28, at 3:00 pm Eastern, the SPAC disclosed in a Securities and Exchange Commission (SEC) filing.
A press release from yesterday reiterated Rainier’s intentions to follow through with the merger and even ring the Nasdaq’s opening bell tomorrow, March 1. HUB is now expected to open for trading tomorrow, March 1, under the ticker HUBC. Yet the lack of a final vote still leaves things up in the air.
More About the Merger Process
According to Calcalist, an Israeli business news website, HUB and Rainier were previously supposed to merge at the beginning of February, and the deal was going to assign HUB a valuation of $1.28 billion. But the Israeli firm announced in January that the transaction would be delayed until “the end of” February.
According to Calcalist, the merger was delayed because a hedge fund called Clover Wolf, which was supposed to invest $10 million in HUB in conjunction with the merger, pulled out of the deal. HUB reportedly recruited another investor, A-Labs Advisory & Finance, to commit to spending $10 million to facilitate the transaction in Clover Wolf’s place. But no significant institutions in Israel, or outside of it, are investing in HUB in conjunction with the transaction, Calcalist reported.
Meanwhile, as of early this month, HUB was trying to obtain about $2.7 million of loans at an interest rate of nearly 10% from ” Israeli institutions and private investors,” Calcalist added.
In June 2022, HUB had $11.1 million in cash and lost money at an annual rate of $41 million.
Finally, last month, HUB reported that its CEO would become its President of U.S. Operations, while one of its board members would take over the CEO position. HUB stated that the change was made in order “to better focus resources and attention on the North American strategic business development.”
HUB’s Story and Offerings
Launched in 2017 by veterans of elite Israeli military units, HUB says that it “specializes in unique Cyber Security solutions protecting sensitive commercial and government information.” The firm has an “advanced encrypted computing solution aimed at preventing hostile intrusions at the hardware level while introducing a novel set of data theft prevention solutions.”
On the date of publication, Larry Ramer 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.
