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Can't spell Space without SPAC (and Sir Richard Branson)

The Nightcap newsletter: SPAC Track’s nightly recap of the action in the SPAC world. (August 23, 2021)

Good evening!

Thanks for reading the Nightcap by SPAC Track. You can always discover and track all of the SPACs at spactrack.net.

Today, Virgin Orbit announced a merger deal with NextGen Acquisition Corp. II (NGCA: $9.86). This is the second company from Sir Richard Branson to SPAC— the first being Virgin Galactic (SPCE: $25.44), which completed its merger with Chamath Palihapitiya’s Social Capital Hedosophia in late 2019.

Branson has also launched a couple of SPACs of his own: VG Acquisition Corp, which completed its merger with 23andMe (ME: $8.29) in June, and another one that IPO’d in March and is searching for a target.

As he has tackled both the buy and sell-side of the SPAC transaction, all that is left is to get a piece of the underwriting fees. I’m looking forward to the announcement of the next venture to come out of Branson’s camp, Virgin Sachs.

The sun is shining a little more on De-SPACs to kick off the week… As of today, there are 110 De-SPACs completed year-to-date with 30% trading above their $10 IPO price. That number was 24% last week.

The average return among De-SPACs (common shares only) completed YTD is -6.3%. The top performer, Stem (STEM: $23.70), is up 135% while the bottom is Ensysce Biosciences (ENSC: $3.16) at -68%.

The Stats:

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The Deals (1):

1) NextGen Acquisition Corp. II (NGCA: $9.86) & Virgin Orbit

  • Merger Partner Description:

Virgin Orbit builds and operates one of the most flexible and responsive satellite launchers ever invented: LauncherOne, a dedicated launch service for commercial and government-built small satellites. LauncherOne rockets are designed and manufactured in Long Beach, California, and are air-launched from a modified 747-400 carrier aircraft, Cosmic Girl, which allows Virgin Orbit to operate from locations all over the world in order to best serve each customer’s needs.

In just a span of four years since its creation in 2017, Virgin Orbit has developed a proprietary air-launch technology, coupled with world-class manufacturing infrastructure and a proven team to transform space access for a diverse and global customer base.

  • Valuation: $3.22B EV

  • PIPE: $100M fully-committed PIPE led by strategic and institutional investors including Boeing and AE Industrial Partners, in addition to existing Virgin Orbit investors and NextGen

  • Press Release

  • Investor Presentation

The Hippo in the room: How the insurtech unicorn lost half its value in two weeks (Calcalist)

Hippo (HIPO: $3.99) suffered another hit following the release of its first results as a public company last week. The company's share price dropped by 15% despite the firm's announcement that it had crossed $500 million in total generated premium in force in Q2 of 2021 and year-one customer retention grew to 88%. The home insurer saw its total amount of generated premium increase by 101% to $159 million. However, of the $501 million generated, only $21 million was ultimately reported as revenue. The company's Gross Loss Ratio in the second quarter of 2021 was 161% compared to 106% in Q2 of 2020, far from the 60% it said it was targeting when it went public.

Hippo explained that severe hail storms in parts of Texas, where 19% of the company's clients are located, hurt its bottom line with Q2 residential cat losses in Texas being the third-highest reported in the past 24 years.

That also contributed to a Net Loss of $84.5 million in the quarter compared to just $24.8 million over Q2 of 2020. This also led to an Adjusted EBITDA Loss of $42.3 million in Q2, an increase of $23.5 million compared to last year. That was also partially the result of a jump in the company's operating expenses, which increased 54% from the prior year to $47 million. Headcount growth contributed to increases in all major categories, with Hippo now employing 603 people, up 117% from 278 last year.

Wand, nevertheless, remains extremely optimistic. “We will drive growth and focus on bottom-line metrics as we grow. We will carefully deploy the more than $900 million that we have on our balance sheet, to enhance our product offering and our growth, in order to become a leader in this industry,” said Wand during last week’s earnings conference call. “Home insurance is a vast, $110 billion industry, and we, at Hippo, have now crossed the $500 million mark. While this is a great milestone for the company… We are just beginning.”

Quick News Corner:

  • RMG Acquisition Corporation II (RMGB: $8.85) completes business combination with ReNew Power. Set to trade as RNW tomorrow

  • LIV Capital Acquisition (LIVK: $10.40) completes business combination with AgileThought. Set to trade as AGIL tomorrow

  • Navitas Semiconductor and Live Oak II Acquisition Corp. II (LOKB: $9.92) Announce Additional PIPE Investment and Up to 2mm-Share Redemption Backstop In Connection With $1.04 Billion SPAC Business Combination

New S-1s (1):

  • $200M, 1/2 warrant

  • Focus: Direct selling industry in the US

Upcoming Dates:

This Week’s Announced Shareholder Meetings, Unit Splits, Warrant Redemptions

Tues, August 24

  • Merger Meetings: Alpha Healthcare Acquisition Corp. (AHAC: $10.19) & HumacyteLocust Walk Acquisition Corp. (LWAC: $9.25) & eFFECTOR Therapeutics

  • Warrant Redemption: QuantumScape (QS: $20.59)

Wed, August 25

  • Merger Meetings: Good Works Acquisition Corp. (GWAC: $9.94) & Cipher MiningTortoise Acquisition Corp. II (SNPR: $9.05) & Volta

Thurs, August 26

  • Merger Meeting: LGL Systems Acquisition Corp (DFNS: $9.64) & IronNet

Fri, August 27

  • Merger Meetings: Blue Water Acquisition Corp. (BLUW: $10.16) & Clarus TherapeuticsTWC Tech Holdings II Corp (TWCT: $9.97) & Cellebrite

Thanks for reading,

SPAC Track

DISCLAIMER: The information provided in this newsletter is for your convenience only and is not intended to be treated as financial, investment, tax, or other advice.