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Many factors indicate a very near-term announcement of a large and lucrative deal, which deserves attention. There can be nothing certain in the world of investing world, but these factors come together to paint a very compelling picture.
-PNTM had extreme financial expenditures on administrative (deal finding) costs. In fact, they went from spending around $500 k per quarter, to spending $3.1+ million in the last reported quarter. This is an extreme jump, and indicates spending well above what would even be needed to close an basic deal for a small company (this is my opinion based on looking at other expenditures needed for deals. Deals for even decent companies can be completed for half as much. Please feel free to add examples)
-PNTM completed a NEW, INCREASED working capital loan agreement at the same time that they were spending over $3 million in administrative expenses. Specifically, they increased from a $1.2 million dollar working capital loan to a $4 million working capital loan. Why would they need so much, and in a quarter where they already burned over $3 million??? (Additional working capital deal completed September 30th 2021, the same quarter they had the extreme administrative spending, making it unlikely that they needed it for anything other than closing the same deal they were working on)
*Keep in mind that PNTM already started with a “$2.0 million Private Placement not held in the Trust Account” that they could draw from as well
*This type of extreme spending in such a short time period is almost unheard of (unless of course, a big deal is about to occur)
-Founders are locked up for 3 years. Founders expressed great confidence in the company and its future success (i.e. They don't plan on it dumping and staying down as we've seen happen with some. This is a crucial factor in a SPAC's price appreciating both short and long term). Why would the founders and insiders agree to be locked up for 3 years from inception unless they plan the stock rising. There is no reason to waste time with a bad deal when they could make more money elsewhere. (see the image below)
-Insiders and backers are paying higher than normal value for their investments, specifically their warrants. They're actually paying MORE than many retail, $1.50 per share in fact. Their investment is completely worthless if the SPAC doesn't succeed. Why would the founders and insiders pay MORE than retail for warrants if they thought the stock would drop. They actually lose money until warrants exceed $1.50. They barely make any money if warrants hover between $1.50 - $2.00. These deep pocket investors are investing for large profits, not small gains. (see the image below)
-Units only included 1/3 of a warrant, yet the offering price kept increasing as institutional confidence was so strong (see below section)
-The initial offering increased twice, going from 375 million to 600 million, and then it increased again to 690 million when the full over allotment was exercised
-There is $690 million in trust (after 3 increases)
-There is an additional $150 million forward purchase agreement already in place to support an even larger deal (On January 12, 2021, the company entered into a forward purchase agreement with QVIDTVM Management LLC providing for the purchase of up to 15,000,000 forward purchase units)
-Several major targets such as Northvolt are within their geographic region, target sector, and their connected management would have the capacity to achieve the deals, especially with their commentary about believing in and seeking long term success for PNTM
*Although one should not buy a stock ONLY for one rumored target, there are almost unbelievable similarities between PNTM's description of their target and Northvolt's description of themselves. Please compare Northvolt's self description and the PNTM target description --- simply draw your own conclusions. ***NOTE - The target doesn't need to be Northvolt for PNTM to have great success, rather, the point is that PNTM is targeting a high quality Northvolt-like company (if not Northvolt itself)
More comparison's can be drawn from the Northvolt news story below:
Volume has been abnormally heavy since the financial news was released and rumors of their impending deal began to spread. Warrant volume and movement is notable and has increased significantly since some of this information has come to light.
(Warrant volume shown below)
*These factors don't seem like they matter, but when added in cumulation with the above, they matter. These are simple things to look for as clues to whether you are dealing with a garbage SPAC*
-They do things that show they take the company seriously. E.g. The website is well put together. It includes a lot of relevant information about their goals, a well presented description of the board, and even details about their corporate policies. This shows they take their organization seriously and it's not just a SPAC they threw together on the side of what they really care about.
-PNTM is listed as the CEO's main position in his bio that can be seen on multiple platforms.
It appears that PNTM is his job and PNTM is what he is focusing on. He is invested as a founder and stands to lose a lot of money if it fails. This is a guy that has led a 23+ billion a year company (CNH) and now he is leading this SPAC. Do you think he wants to merge with an unsuccessful/failure of a company, knowing that he will have a large financial interest in the company for years (the lockup period at least) and likely a leadership role as well?
-There are quality underwriters involved: Credit Suisse & Guggenheim Securities
-Well-connected management with more than impressive backgrounds. The leadership and the board is deep. This isn't just a one star SPAC with minimal connections. Many players have led multi billion dollar companies and they're still active in them. They have stated from the beginning that deals will be coming to them from their extensive connections. Leading MAJOR companies like $CNH, $WBT, and others is key to landing a big deal with another big player. Take a look at the backgrounds of the board members and leadership: Pontem Corp. | Team
Disclosure / Disclaimer- I am long $PNTM at the time of this post, and I intend to stay long for the foreseeable future to see how well their deal/target can succeed.
I am not a financial adviser. This post is just ideas and observations, not investment advice.