One of the hottest investment trends of 2020 has been the rise of specialty purpose acquisition companies, commonly known as SPACs.
Companies like DraftKings DKNG, Virgin Galactic Holdings SPCE, Repay Holdings Corp. RPAY and Immunovant Inc. IMVT has seen shares double since going public via this route.
A typical SPAC prices at $10 a share. Several SPACs from 2020 now find their shares below this level and into penny stock territory with their share price below $5.
Below is a look at five former SPACs that are now penny stocks.
Hall of Fame Resort & Entertainment Company: In August, the Hall of Fame Resort & Entertainment Company HOFV showed off its ambitious goals to be an integrated destination, media and gaming company centered around the National Football League.
The company merged in a SPAC deal with Gordon Pointe Acquisition Corp. It believes it has multiple points of monetization with themed attractions, hospitality, live entertainment, media and gaming opportunities.
Phase I for the company is already completed with the Hall of Fame Stadium near the NFL Pro Football Hall of Fame in Canton. Phase II includes and indoor water park, several hotels and retail development near the Hall of Fame.
Phase III includes up to $300 million in new assets across 600 acres of available land.
The company reports that half of NFL franchises are within an eight-hour drive of the Hall of Fame.
In 2019, the company hosted 73 events centered on its football stadium.
By 2026, Hall of Fame Resort & Entertainment expects revenue to hit $150 million from nine segment streams.
The major contributors are expected to be waterpark (22%), stadium (15%) and hotels (15%).
Going forward, the company said it can target other cities with NFL franchises for expansion.
Glory Star New Media Group: In February, the SPAC merger between Glory Star New Media Group Holdings GSMG and TKK Symphony Acquisition Corporation closed.
Shares have fallen from $10.31 to $2.73 since the deal closed.
Glory Star is a Chinese mobile entertainment operator.
In August, the company reported it had 100 million users on its CHEERS app.
In June, the company had average DAU of 4.9 million for the CHEERS app with over 121 million downloads.
Users viewed 17.1 billion videos of content in the first half of 2020.
The CHEERS app saw order volume increase 780% during an ecommerce shopping festival in June that included over 12000 participating brands like Apple Inc. AAPL, Sony Corp. SNE and Dior.
Glory Star reported revenue of $29.4 million and net income of $12.0 million in the first half of 2020. The company has a long-term goal to grow the number of users on the CHEERS app to 800 million.
Lion Group Holding: Trading platform company Lion Group Holding LGHL provides services to people in China and Hong Kong.
Services include securities trading, insurance brokerage and futures trading. The company offers asset management, wealth management, risk management and offshore strategies.
The company combined with Proficient Alpha Acquisition Corp earlier in 2020.
In the first half of 2020, Lion Group reported revenue of $6.4 million, a 20% year-over-year decline. Net income fell 31% year-over-year to $2.4 million.
The company ended the first half of 2020 with 3,980 total revenue generating customer accounts.
Covid-19 was a factor in trading volume according to the company. In the quarter, the company did establish agreements with two of the top five swap traders in China.
Lion Group expects revenue to come in a range of $10 to $13 million for the second half of 2020.
Meten Edtechx: English language training company Meten EdtechX Education Group METX merged with EdtechX Holdings Acquisition II in a SPAC deal.
Meten operates with three segments of adult/junior ELT services, junior ELT services and Likeshuo online ELT.
The company has 1.6 million registers users for its online platform. Meten operates 112 learning centers across 29 cities in 15 provinces in China.
In October, Meten announced a strategic partnership with Renaissance Learning, a global leader in K-12 English assessment and reading educations.
Renaissance operates in 96 countries with 18 million users. One third of U.S. schools and half of U.K. schools use Renaissance products.
The company reported revenue of $200 million in 2018 and adjusted EBITDA of $20.1 million. The company expects revenue to grow 50% by 2021.
American Virtual Cloud Technologies Inc.: Pensare Acquisition Corp merged with American Virtual Cloud Technologies Inc. AVCT in April.
The goal of American Virtual Cloud is to create IT solutions for cybersecurity and tech companies. The company has over 900 enterprise customers.
The company is addressing the multi-billion dollar enterprise TMT sector.
In August, American Virtual Cloud acquired the Kandy communications business of Ribbon’s Communications RBBN. The acquired business is a highly scalable cloud communication platform that was founded in 2014.
Ribbon’s Communications received 13 million American Virtual Cloud shares as part of the deal.
The company recently hired former AT&T T veteran Xavier Williams as the CEO. Williams was with AT&T in executive roles for over 30 years.
“AVCT is extremely well positioned to win in the fast-growing cloud communications and IT services industry. Together, we plan to drive sustainable, industry-leading growth that benefits employees, shareholders and the communities in which we operate,” Williams said.
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