What's Going On With SoundHound AI Stock Today?

What's Going On With SoundHound AI Stock Today?

SoundHound AI Inc SOUN shares are soaring on above-average volume Tuesday. The company completed a SPAC merger with Archimedes Tech SPAC Partners Co. last week and saw a high redemption rate.

SoundHound's average session volume is about 6 million, according to data from Benzinga Pro. Tuesday's trading volume has already exceeded 16 million at press time. 

SoundHound made its public debut last week following its SPAC merger. According to a Form 8-K filing with the SEC, holders of an aggregate of 12,767,950 shares (roughly 96% of shares outstanding) exercised rights to have their shares redeemed for a pro rata portion of the trust account holding the proceeds from the initial public offering. 

SPACs often have redemption rights, which give investors the right to sell their shares back to the acquisition company for net asset value if they don't want to own the proposed company.

The redemption of SPAC shares reduces the amount of outstanding shares which also leads to a decline in the amount of shares available to short. Therefore, high redemption rates can often induce short squeezes. 

See Also: Why Chegg Shares Are Falling

SOUN Price Action: SoundHound shares have traded between $5.75 and $12.38 since going public last week.

The stock was up 45.8% at $15.99 at press time. 

Photo: courtesy of SoundHound.

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