Dec 9, 2021
[2 min Read]
2K in commons
2.4K in warrants
I previously posted my first asymmetric risk play on $GGPI few weeks ago with good entry and exit prices to leave you with 20-50% profits.
Now I am posting another SPAC that presents good upside with limited downside.
Figure 1. $BCAC - Brookline Capital Acquisition Company is hoping to target a firm in the LifeScience/HealthCare/Biotech. It is a $50 Million SPAC with a small float. Trading under NAV and warrants under $1
$BCAC is planning on targeting a company that is in the Life Sciences/Biotech sector. The SPAC is on the smaller end of the Goldi-locks zone. It is a $50 Million trust with a small float. The commons are trading under NAV and pre-DA warrants <$1. When their LOI is published I can see the warrants spiking to >$3 and commons to $11-12. This is due to the combination of a small float and an excellent SPAC team (https://brooklinecapitalacquisitioncorp.com/) based in New York, New York. Obviously if you want to hold longer look at the S1, the deal, and take into consideration dilution.
Furthermore, previously the warrants where trading >4$ with a lot of holders around that range from Feb 2021.
Figure 3. I pulled up data on https://track-funds.com/ and noticed recently 25% increase in institutional ownership of the stock which can either mean more arbs joining in or family offices and other funds buying into the fund.
In the past few months a lot of us on r/SPACs have noticed pre-DA SPACs present great opportunity for profits. The major downsides being 1) keeping your money on SPACs that might take months to DA 2) your warrants going to zero if the deal collapses or the SPAC shutting down. You can mitigate against the latter risk by selecting a quality SPAC and the former risk by spreading your capital.
For $BCAC to be safe just buy commons at $10 since I suspect DA is soon and sell for 10-15% profit. You can buy the warrants as long as <$1 but they have increased volatility and risk. However with DA they can go to >3$ because of the low float.
As usual do your own diligence. Just my musings. Not investment advice!
$BCAC is a quality pre-DA SPAC with a low float. Volumes are increasing indicating imminent DA. Safest is to buy commons and sell on $10-15% profit. Warrants are volatile and may go to $3 but are riskier.