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Highlights
- The ISPO stock surged over 772% on Thursday.
- The CPTN and ANGH stock soared over 746% and 199%, respectively.
- Inspiration went public on February 14.
The stocks of Cepton, Inc. (NASDAQ:CPTN), Inspirato Incorporated (NASDAQ:ISPO), and Anghami Inc. (NASDAQ:ANGH) skyrocketed on Thursday, drawing massive attention amid a broad slump in the market.
The ISPO stock grew as much as 772%, while the CPTN and ANGH stock soared around 746% and 199%, respectively, in intraday trading on Thursday.
Why did the stocks skyrocket?
These companies had recently gone public through SPAC mergers. But many SPAC investors who were offered shares after the deals closed chose to redeem their shares for cash. Many others have also returned later to redeem their portion after the stocks went public.
These activities may have triggered the stocks rally.
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The SPACs get redemption rights through which investors can sell their shares back to the acquisition firm if they don't want to retain any part in the new firm.
Meanwhile, over 98% of the public shares in Thayer Ventures Acquisition Corp, the blank-check firm through which Inspirato went public, were redeemed for cash by investors before the transaction's closing, according to the company's filing on February 14. It implies that close to 300,000 public shares remained after the deal combination.
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Similarly, the redemption rate in the other two SPACs that brought Cepton and Anghami public was also higher, around 90% for each, during the deal close.
Inspirato (ISPO) and Anghami (ANGH) were the most discussed shares in traders’ chatrooms like Stocktwits. The ISPO ticker's message volume rose more than 6,000% in the chat group.
The Inspirator (ISPO) was among the most traded securities on the Fidelity platform Thursday.
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Source: Pixabay
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Cepton Inc.
Cepton is a California-based firm that offers lidar-based solutions for smart cities and industries.
The CPTN stock closed at US$42.00 on Thursday, up 343.51% from its previous close. The company went public on February 11, and its market cap is US$6.46 billion.
On Friday, the stock traded at US$35.04 at 9:35 am ET, down 16.57% from its previous close.
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Inspirato Incorporated
Inspirato is a California-based innovative luxury travel subscription brand that offers vacation-related services to travelers.
The ISPO stock closed at US$92.65 on Thursday, up 648.38% from its previous close. The company went public on February 14, and its market cap is US$3.29 billion.
On Friday, the ISPO stock was down 21.21% to US$73.00 at 9:39 am ET.
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Anghami Inc.
Anghami is a music-streaming platform and digital distribution firm based in Abu Dhabi, UAE. It went public on February 4, and its market cap is US$744.20 million.
The ANGH stock closed at US$28.88 on Thursday, up 161.36% from its previous closing price.
On Friday, the company's stock declined 30.57% to US$20.05 at 9:42 am ET.
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Bottomline
The SPAC companies’ redemption rates surged by around 90% in February, suggesting the companies that went public recently have very low share floats. Generally, higher redemption rates could intensify the price swings in stocks.
