Are you looking for the best ex-SPAC stocks to buy now?
It might not be your cup of tea, but Trump Media & Technology Group (NASDAQ:DJT) is one of the best-performing ex-SPACs currently listed on a U.S. stock exchange. Since Donald Trump won the Iowa primary in mid-January, its shares have appreciated by 52%, hitting a 52-week high of $79.38 in late March.
Special purpose acquisition companies, or SPACs, have never had a glowing reputation.
However, Bloomberg recently pointed out that Vertiv Holdings (NYSE:VRT), a provider of technology infrastructure for AI-related stocks is the best-performing ex-SPAC to go public. It’s up 555% since its merger with a SPAC in 2020. That’s one choice, but what would be others with the same potential?
According to a report by Bloomberg on April 8:
“The likes of Vertiv, DraftKings Inc. and Symbotic Inc. stand out in a sea of pain for firms that have gone public via SPAC mergers. More than one-fifth of the nearly 500 SPAC deals that have closed since 2019 are trading below $1 each, representing a greater than 90% plunge, data compiled by Bloomberg show…”
Here’s my take on three possible ideas.
DraftKings (DKNG)
DraftKings (NASDAQ:DKNG) is up nearly 348% from its SPAC initial public offering price (IPO). The company went public via a merger with the Diamond Eagle Acquisition Company in April 2020. Diamond Eagle itself had previously gone public in May 2019, selling 35 million shares at $10 each.
As I said in September 2020, Diamond Eagle was the fifth SPAC for Harry Sloan and Jeff Sagansky, two of Hollywood’s most prominent players. Thanks to its success, DraftKings became a poster child for SPACs and is currently one of the best-performing ex-SPACs.
In October 2023, I recommended DraftKings and two other stocks I thought could double in 2024. DKNG gained 209% in 2023. Year-to-date, it’s up 32%. I don’t know if it will double this year, but it could come close. The business continues to take market share in online sports betting in the United States. Currently, DraftKings’ primary challenger for market share is Flutter Entertainment (NYSE:FLUT) through its Fanduel service. Ultimately, both should benefit from the lively competition.
At the very least, DKNG should retest its all-time highs in the $70s by the end of December.
Symbotic (SYM)
Symbotic (NASDAQ:SYM) is up 325% from its SPAC IPO price. To go public, the company merged with SVF Investment Corp. in June 2022. SVF went public in March 2021, selling 28 million units at $10 each. Softbank was a SPAC from Japanese venture investment firm Softbank Group (OTCMKTS:SFTBY).
Symbiotic was also on my list of three stocks for 100% returns in 2024. The automation stock did very well in 2023. It’s cooled off this year, down more than 14% YTD.
However, I continue to believe in the automation stock.
In December, I recommended SYM stock and two others that larger businesses could acquire. So far, I’ve seen no speculation about a buyout, so it will just have to deliver for shareholders the old-fashioned way: it will have to earn the gains.
Two things make it less likely that Symbotic will be acquired: CEO Richard Cohen controls 89.5% of the votes. He’s got a great gig making a difference in warehouse robotics. Second, as of the end of fiscal 2023 (September 2023), it had a $23 billion backlog.
Blue Owl Capital (OWL)
Blue Owl Capital (NYSE:OWL) is up 85.3% from its SPAC IPO price. The company went public in a three-way deal that saw Owl Rock Capital Corp. merge with Dyal Capital Partners in May 2021. Then, the companies merged with Altimar Acquisition Corp. to go public. At the time, Altimar had been listed as a public company since October 2020, when it sold 25 million shares at $10 each.
To finance the merger, Owl Rock provided alternative credit investments, while Dyal made minority investments in other asset managers. Together, they had over $70 billion in assets under management (AUM) by May 2021. Today, the company has more than $185 billion in AUM.
Expanding even further, it entered the real estate finance business on April 9, by acquiring Prima Capital Advisors for $170 million. It manages $10 billion for high-net-worth individuals and institutional investors. Most of the acquisition will be paid for in cash.
At the same time, it announced that Jesse Hom, previously the Global Head of Real Estate Credit at GIC (Singapore’s sovereign wealth fund), would join Blue Owl to lead its Real Estate Finance strategy.
On the date of publication, Will Ashworth 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.
