How does the trading price of a SPAC relate to the price they pay for the company, merger, etc?

Discussion in 'Trading' started by CyJackX, Feb 22, 2021.

  1. CyJackX

    CyJackX

    Noticing the drop in CCIV from 60 to 40 on confirmation of the merger news.
    Typical buy the rumour, sell the news situation, eh? Thankfully was not long.
    I did sell a ratio put spread for March though at 50 -2x40...it ended AH at 40, a month early for me to be perfectly at 40, but I guess I'll see whether there's nice volatility crush tomorrow morning.

    Anyways, so did CCIV drop just from selling the news, or was it related to the announced details of the merger, such as how much they were paying for it, etc? Was it because they were paying more than expected for Lucid? Or is it some other detail that emerged?
     
  2. What's better about this one then the other 16 optionable spacs
     
  3. CyJackX

    CyJackX

    Gotta say, no idea, which is why I bet on it dropping at least. Such high IV, figure I'd sell some theta.
     
  4. When the CCIV rumor came out, the stock traded in stairstep from $13-$20. I made a few $ per share off that. IMO, anything over $20 was just pure bubble territory. Everyone that got in early on was expecting the confirmation of merger to gap this stock up to around $30. What happened instead was they didnt confirm until more than a month later, and meanwhile, idiots bid this stock up to $60. A company that generates no revenue currently if i'm not mistaken.

    SPACS are all in bubble territory. If you're going to buy a spac, don't purchase them over $14.
     
  5. Here4money

    Here4money

    seems like value of merger and number of outstanding shares puts this at ~15$/share
     
  6. S2007S

    S2007S



    That's what I heard this morning.

    The disconnect and hype of this spac jumping from 10 to 60 was just that, more spac bubble fun.