5 Long-Term SPACs For Investors To Consider
Chris Katje is a co-host of Benzinga's YouTube show, "SPACs Attack," with Mitch Hoch.
On a recent episode of Benzinga's "SPACs Attack," we offered five long-term SPAC picks for investors to contemplate. With many SPACs trading down in 2021 on lost interest in the market and questions on forward-looking financial expectations, it would be wise for investors to look at which companies could be the best long-term options.
Here is a look at five long-term SPAC mergers that could be winners.
Learn more: How to Invest in SPACs
Draftkings Inc (NASDAQ:DKNG): Online sports betting company DraftKings could be a long-term winner but has also performed well since completing its SPAC merger.
If you’re looking long-term, this year, next year, or five years out, DraftKings is a winner.
DraftKings is the market leader with operations in more states than any competitor for online sports betting. The company has strong brand awareness and had an early advantage with a large customer base from its daily fantasy sports business.
And, the company has a dominant market share in the states it's in.
DraftKings is pushing into media and content, which could help its revenue and also customer acquisition costs. The company acquired VSiN, a sports betting media company. DraftKings also hired its first chief media officer, a newly created role that will oversee content creation and media strategy for the company.
Another catalyst to watch is the company’s switch to SBTech to power its platform. This change from current provider Kambi is a result of acquiring SBTech as part of the SPAC merger. The switch could lead to increase margins.
MP Materials (NYSE:MP): Rare earth mining company MP Materials could be a great way to invest in the push for the U.S. to wean off of China’s supply chain.
The company completed its first stage and is now working on stage two to be completed in 2022. Stage three will take the company to magnet making, and then the company will be able to sell its finished products direct to customers, thus completing the company’s mission of restoring the full rare earth supply chain in the U.S.
This is a stock you're not buying for this year, you’re buying it for a couple of years out.
MP Materials had revenue of $42.2 million in the fourth quarter and $134.3 million in the last fiscal year, increases of 100% and 83% year-over-year respectively.
It is a company with real revenue.
Fisker (NYSE:FSR): Electric vehicle company Fisker has more than 15,000 reservations for its upcoming Fisker Ocean SUV.
The company is working on marketing and design and working with partners to manufacture its vehicles, a move that could pay off for the company in the long run.
Fisker has partnered with Magna International Inc. (NYSE:MGA) and Hon Hai Precision Industry Co. Ltd – ADR (OTC:HNHPF), better known as Foxconn, on its first two vehicles. The manufacturing partners were highlighted in a bullish note from Morgan Stanley naming Fisker one of the best EV startups. Morgan Stanley has a $40 price target and a $90 bull case price target.
The Fisker Ocean electric SUV is on track to begin production in the fourth quarter of 2022.
Redwire: Set to merge with Genesis Park Acquisition Corp (NYSE:GNPK), Redwire is a mini space infrastructure ETF all in one stock. With an investment in Redwire, shareholders are “getting multiple areas of exposure in the space market.”
The company was purpose-built to be a pure-play space company covering areas like on-orbit servicing, low-Earth orbit commercialization, digitally engineered spacecraft, space domain awareness and advanced sensors.
Redwire is a leader in the 3D printing market for space and its infrastructure services have enabled nearly every space mission. Redwire enabled missions to Mars, Pluto and multiple asteroids.
Redwire had revenue of $119 million and EBTIDA of $12 million in fiscal 2020. The company is predicting revenue to grow at a compounded annual growth rate of 72% from 2021 to 2025. The company’s pipeline could be worth $23 billion from identifiable contracts and the current backlog is $150 million.
Quantum-Si: Semiconductor company Quantum-Si is going public in a SPAC merger with Highcape Capital Acquisition Corp (NASDAQ:CAPA). The SPAC deal included an oversubscribed PIPE of $425 million that included investments from accounts advised by Ark Invest.
Quantum-Si is planning to launch a chip-based proteomics solution and believes it can change the protein and genomics markets. The company also completed the first next-gen protein sequencing platform.
A scalable semiconductor chip for home testing could be ready after 2024.
A commercial launch for Quantum-Si is scheduled for 2022 and the company is targeting a $21 billion market size.
The company is pre-revenue with 2022 as the first estimated year for revenue and 2025 is when the company will really scale its unit and revenue projections. By 2025, the company anticipates over 5,000 units installed.
Disclosure: The author is long shares CAPA and FSR.
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