There are big intraday stock moves, and then there’s the kind of move companies like iCoreConnect (NASDAQ:ICCT) make on a given day. Today, ICCT stock is up more than 250%. That means investors who bought shares of this little-known company have more than tripled their money overnight. It’s one of the market’s biggest movers, obviously, with a move like this today.
The workflow management company is on many investors’ radar today, following the company’s completed special purpose acquisition company (SPAC) merger a few days ago. It’s technically only the stock’s second day of trading, which likely contributed to today’s impressive move. It appears the 24-hour period investors had to digest the company’s growth prospects, given its new funding, has led many to jump into this name.
Let’s dive into what investors should watch with this high-flying stock today.
Why Is ICCT Stock Up 250% Today?
Interestingly, many investors may note that certain SPAC deals have gotten outsized (positive) attention of late. iCoreConnect appears to be just the latest company to see a post-merger move higher. Investors are clearly factoring in some new information into this stock today.
One of the key drivers of today’s move in ICCT stock appears to be a clarification the company released regarding how the merger actually affected the company’s shares, warrants, and preferred stock. The nuts and bolts of this announcement is that every 29.84 shares of ICCT stock prior to the closing translated into one share of the merged entity. That’s equivalent to a $5.71 per share price. Thus, today’s move, which saw ICCT stock surge from a close of $1.59 yesterday to around $5.64 at the time of writing, appears to be directly tied to the underlying value implied by the merger. It appears that many in the market miscalculated this yesterday.
As part of the announcement, the company also made clear that there is some preferred stock that will trade on the OTC market that isn’t a part of this deal. Thus, calculating the true enterprise value for this name isn’t as easy as it might appear. These preferred shares carry a hefty 12% coupon. And it’s unclear to what extent the company will have the cash flow to pay out these dividends or if capital or debt markets will need to be tapped to pay these preferred dividends or potentially retire those shares.
Overall, this is a SPAC merger that is very complicated and is one the market appears to have misplaced. With all that considered, it’s too speculative for my blood. That said, it will be interesting to see if shares of ICCT stock remain around these levels in the coming days or if the market reprices these shares downward.
On the date of publication, Chris MacDonald 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.
