Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Soaring Eagle Stock Is A SPAC Opportunity With A Track Record

By MarketBeat.com (Jea Yu )Stock MarketsMar 16, 2021 06:37AM ET
www.investing.com/analysis/soaring-eagle-stock-is-a-spac-opportunity-with-a-track-record-200567516
Soaring Eagle Stock Is A SPAC Opportunity With A Track Record
By MarketBeat.com (Jea Yu )   |  Mar 16, 2021 06:37AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Special purpose acquisition company (SPAC) Soaring Eagle Acquisition (NASDAQ:SRNGU) stock has no news, volume, or much movement for now. It’s very much like the famous quote describing the iconic syndicated Seinfeld show being described as, “a show about nothing”. For now, Soaring Eagle is a stock about nothing. However, a closer look at the management should provide a better context in the caliber and prowess of the current team’s ability to find another explosive reverse merger. The SPAC boom and mostly bust cycles have burned many investors who overpaid for and/or overstayed in their positions. Shares have pulled back since the IPO highs near $11.29 back down closed to the $10 offering and floor price. This enables high risk-tolerant investors opportunistic pullbacks to consider taking a purely speculative position.

A Show About Nothing

According to the FORM 8-K filing on Mar. 4, 2021, the Company generated a total of $1.725 billion comprised of $1.69 billion from the IPO and $25.875 million from proceeds of the sale of Private Placement Warrants with conversion prices of $11.50 per-share. The Feb. 26, 2021, IPO consisted of 172.5 million units comprised of 150 million units and 22.5 million units as a result of underwriters exercise of over-allotment option in full. Each unit is comprised of 1 Class A share and one-fifth of 1 redeemable warrant entitling the holder to purchase shares at $11.50. Simultaneously with the IPO, the Company completed a Private Placement of 19.25 million warrants to Eagle Equity Partners III, LLC, at the purchase price of $1.50 with $11.50 conversion price for additional proceeds of $25.875 million. The SPAC has until Feb. 26, 2023 or Aug. 26, 2023 to find a reverse merger (Business Combination) acquisition or else close operations and redeem 100% of outstanding public shares. In a nutshell, the SPAC has 2-years to find the next acquisition or else redeem all outstanding shares at $10. Theoretically, investors get back $10 per-share if no acquisitions are made in a 2 year period. Therefore, the downside floor is basically $10 per-share. The closer you enter towards the $10 mark, the less your risk.

DraftKings and Skilz

Soaring Eagle Acquisitions management team is comprised of CEO Harry E. Sloan and president and CFO Eli Baker. The management has had two highly successful SPAC business combinations (reverse mergers) in sports betting app DraftKings (NASDAQ:DKNG) and eSports platform Skillz Platform (NYSE:SKLZ). Both stocks are success stories for early investors with DraftKings trading near all-time highs.

DraftKings was a business combination that reverse merged into Flying Eagle Acquisition Corp. operated by Sloan, Baker and Jeff Sagansky in April 2020 for $2.7 billion approximately one year after the IPO of Flying Eagle Acquisition Corp. SPAC. Diamond Eagle Acquisition Corp. IPO’s in March 2020 and reversed merged with Skillz in December 2020 eight months later. The announcements of the business combinations came months prior to the symbol change. Historically, it has taken eight-to-13 months for the reverse mergers to complete.

Soaring Eagle Stock Chart
Soaring Eagle Stock Chart

SPAC Strategy

As previously mentioned, management has had a very successful track record with its last two reverse mergers that averaged eight months to just over a year to complete. The key is getting in as close to the ground floor $10 price range. Any speculation of a reverse merger target should bump up the shares until the official announcement. At this point, an initial sell-the-news reaction is possible and then a rise heading into the shareholder vote to approve the business combination. Prices usually peak just before or into the vote and then collapse for three to eight days under the new symbol. Therefore, it’s important to be nimble in exiting the shares into buyers and be completely out before the business combination as dilution sets in upon the symbol change as evidenced by numerous companies like ChargePoint Holdings (NYSE:CHPT), Canoo (NASDAQ:GOEV), Fusion Fuel Green (NASDAQ:HTOO) and XL Fleet (NYSE:XL) just to name a few.

Opportunistic pullback levels under $10.51 can be taken at $10.45 fib, $10.38 fib, $10.28 fib, and $10.15 fib. The lower the price, the smaller the risk taken. As for selling price levels, its contingent on the actual underlying company under reverse merger, which is the wildcard. As a rule of thumb, consider taking profits incrementally at a 2-to-1 reward to risk ratio. For example, if you average in at $10.40, then take some profits at $11.20 which is 2X the $0.40 risk on the position and raise trail stops to ½ the remaining risk.

Original Post

Soaring Eagle Stock Is A SPAC Opportunity With A Track Record
 

Related Articles

Soaring Eagle Stock Is A SPAC Opportunity With A Track Record

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Jennifer Chen
Jennifer Chen Apr 09, 2021 12:25PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Monsieur Jea Yu detected and analyzed companies with potential values...A great specialist who I appreciate.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email