Although the increasingly vituperative nature of contemporary American politics has popularized George Orwell’s dystopian social-science fiction novel Nineteen Eighty-Four, it’s the famous author’s satirical novella Animal Farm that perhaps best describes the quandary that innovative technology firms find themselves in. Under prior paradigms, futurists wondered about the upper capacities of human ingenuity. Today, questions surround the ethical implications of doing so.
Likely no other sectors draw such scrutiny as artificial intelligence (AI) and the blockchain, two of the core focus areas for Aurora Technology Acquisition Corp. Indeed, these developments are at the intersection of a profound digital revolution that promotes the decoupling from the inherent inefficiencies of human-administered functionalities. As a result, advancements in this burgeoning field can facilitate supply chain enhancements, financial democratization and data integrity and security.
At the same time, as technologists push the boundaries of artificial self-realization, ethicists have become increasingly alarmed that the very foundation that supports novel approaches to equity may in fact be its detriment. According to the Southern Poverty Law Center, ideological hardliners and separatists have used blockchain-based currencies like Bitcoin to fund their misinformation campaigns, thus capitalizing their initiatives outside the clutches of centralized authorities.
In other words, innovation without moral grounding may yield significant unintended consequences. But it’s this backdrop that also draws intrigue for Aurora Technology.
What is Aurora Technology?
As a special purpose acquisition company (SPAC) focusing on innovative arenas, including quantum computing and electric vehicles in addition to AI and the blockchain, Aurora Technology might not initially strike you as unique. However, this SPAC intends to focus its search for merger opportunities that are led by Asian or Asian American entrepreneurs, per its initial public offering (IPO) prospectus.
Against a broader context, Aurora’s market debut arrives at a critical juncture in cross-community relations in the U.S. According to the Department of Justice, misinformation stemming from COVID-19 conspiracy theories has led to increased violations of civil liberties and physical attacks against Asian Americans and Pacific Islanders (AAPI). Thus, Aurora indirectly carries a social weight not found in most other SPACs.
When is the Aurora Technology IPO Date?
Kicking off its public market launch during the final session of January, Aurora Technology has the advantage of entering the IPO calendar on a quiet day for new listings. Aurora shares will trade on the Nasdaq exchange under the ticker symbol ATAKU.
Unlike a traditional IPO, a SPAC (also known as a blank-check firm or shell company) has no underlying operations. Instead, its purpose is to become a publicly traded entity to raise funds in support of a merger with a private enterprise. Essentially, it’s a backdoor method of taking a business public, hence the phrase reverse merger.
Under the terms of the deal, the innovation-focused blank-check firm plans to raise $200 million through the distribution of 20 million units priced at $10. Each unit consists of one share of common stock, one right to receive a tenth of a share following a business combination and one warrant to purchase one-half of a share, exercisable at $11.50.
Although Aurora will enter the frame during a socially significant time for the AAPI community, it’s also one fraught with substantial market risk. Primarily, while mainstream business media celebrated AI and blockchain-based initiatives last year, this year has become anathema to the sector. For instance, popular big data companies like C3.ai Inc. (NYSE: AI) and Palantir Technologies Inc. (NYSE: PLTR) are down 28% and 31% on a year-to-date (YTD) basis, respectively.
Regarding the blockchain, companies associated with the innovation have suffered some of the ugliest print. Bitcoin miner Marathon Digital Holdings Inc. (NASDAQ: MARA) is down 33% YTD while Block Inc. (NYSE: SQ), formerly known as Square, likewise suffered a near-identical magnitude of pain over the same period.
Adding to the dilemma is the Federal Reserve, which has signaled a shift toward a hawkish monetary policy to combat soaring consumer prices. As Benzinga staff writer Bibhu Pattnaik reported, analysts from Goldman Sachs Group Inc. (NYSE: GS) now expect the central bank to “raise interest rates by 25 basis points five times this year, rather than the four rate hikes previously prognosticated.”
If so, you should assume volatility risks for ATAKU stock despite its compelling narrative.
Aurora Technology Financial History
As a SPAC, Aurora Technology features no financial history other than the money it will raise with its IPO. Upon the closing of the offering, the capital accrued will enter escrow to be distributed to the merger target following a successful business combination. Typically, SPACs have two years to merge with a private enterprise. In this case, Aurora has 18 months to secure a deal.
Should no deal be found, IPO participants will receive their money back at the redemption rate (usually the initial offering price of $10). As well, SPAC shareholders vote to approve a proposed business combination. Dissenting stakeholders, rather than moving ahead with a proposed deal, can instead redeem their shares.
According to a December 2021 report from The New York Times, SPAC redemption rates hit approximately 50%, a sharp rise from the 20% seen in 2020. The willingness to absorb an opportunity cost rather than accept a business combination is incredibly telling. What’s more, over the trailing year, SPACs post-merger have greatly underperformed the benchmark S&P 500 index.
Still, it’s important to judge ATAKU stock by its own merits. Though information is lacking (as is typical for a shell company), Aurora potentially enjoys several strong addressable markets based on its intended focus areas:
- Artificial intelligence: According to Verified Market Research, the global AI market size could reach a valuation of $641.3 billion by 2028.
- Blockchain: According to ResearchAndMarkets.com, the global blockchain industry could command a valuation of $394.6 billion by 2028.
- Quantum computing: Per International Data Corporation, experts project consumer spending for the worldwide quantum computing sector to hit $8.6 billion in 2027.
- Electric vehicles: Data from Growth Market Reports indicates that the EV market could become nearly an $803 billion industry by 2028.
Of course, Aurora is not limited to these focus areas, auguring well for the SPAC since modern innovation is constantly churning out fresh concepts and opportunities. Still, the biggest financial concern may be that investors may wait out ATAKU stock. Unfortunately, with the Fed tightening the money supply, there’s little incentive to take aspirational risks.
Aurora Technology Potential
Principally, the biggest catalyst for ATAKU stock is the myriad high-potential industries that the underlying company is aiming its crosshairs at. Every one of its listed focus points enjoys a non-zero probability of dramatically changing the world for the better. As well, the indirect restoration of social dignity for the AAPI community will likely resonate with Generation Z investors.
However, prospective buyers of ATAKU stock must focus first on market realities. Currently, the timing of this IPO is poor due to a lack of incentives for investors to eschew stability and passive income now for possible capital gains later. Plus, the disappointing performance of SPACs overall is distracting.
Finally, a possibility always exists that novel technologies can lead to unintended consequences. Most recently, El Salvador’s much-celebrated foray into Bitcoin is turning into a nightmare and could suffer even more pain if cryptocurrencies don’t substantively reverse course.
How to Buy Aurora Technology IPO (ATAKU) Stock
Interested investors of Aurora Technology must acquire shares at the open, necessitating knowing how to buy stocks. Below is a quick guide.
Step 1: Pick a brokerage.
With the best brokers competing on similar incentives, focus your efforts on platforms that ideally suit your needs.
Step 2: Decide how many shares you want.
All IPOs are risky because of unknown variables. Therefore, choose a balanced share count.
Step 3: Choose your order type.
Before trading, learn these market concepts.
- Bid: The buyer’s best offer for a stock.
- Ask: The seller’s lowest acceptable price.
- Spread: The difference between the bid-ask price, the spread indicates market risk as this is also the profit margin for market makers.
- Limit order: Buy or sell requests at a predetermined price, limit orders provide transparency but no execution guarantees.
- Market order: Market orders guarantee fulfillment but only at the current rate.
- Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower.
- Stop-limit order: Stop-limit orders only leave positions at a specified price, but they also carry non-fulfillment risks.
Step 4: Execute your trade.
Follow these steps to execute a market order:
- Select your action type (buy or sell).
- Enter the shares you want to acquire (or sell).
- Hit the Buy (or Sell) button.
Follow the same sequence for limit orders (but include your execution price).
ATAKU Restrictions for Retail Investors
Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating in an IPO. Don’t engage if you have privileged information.
Unfortunately, no pre-IPO opportunity is available for ATAKU stock.
A SPAC Paved with Good Intentions
Occasionally, private and public interests intersect in meaningful ways, which most hope will be the case with ATAKU stock. With a focus on AAPI entrepreneurialism, Aurora Technology may help productively transition from a troubling chapter in American history. Still, timing represents a serious concern, necessitating careful due diligence.
Disclosure: The author holds a long position in Bitcoin.