The SPAC stocks have been in action and there are some potential investment opportunities to watch for.
A special purpose acquisition company (SPAC) is a company that is created to acquire other existing firms and for that, the capital is raised through IPOs. SPAC firms do not have any motive to have commercial operations.
CNBC’s Mad Money host, Jim Cramer bashed Wall Street said that when the SPAC stocks get hammered as a group, Wall Street tends to throw the baby out with the bathwater. He was referring to the events that unfolded earlier this week.
Mad Money’s host added that the investors should watch the next time when well-positioned SPACs go bearish, that is the potential buying opportunity for investors. So, let’s look at the SPAC stocks that investors should keep under their radar.
MP Materials Corp. (MP)
MP Materials Corp. (MP) is an American rare earth materials company headquartered in Las Vegas. The company has had tough times during the pandemic but things are getting interesting. MP is possibly approaching a major achievement in its business.
With the latest financial year loss of $6.8 million and a trailing 12-month loss of $45 million, the company is expected to get back on track by the end of this year. This is pushing the stock towards its breakeven target. For investors, the most concerning point is MP’s path to profitability – when will it breakeven?
The two industry analysts covering MP Materials are expecting the stock to be near breakeven. They are anticipating the company to end the loss reign and finally post a profit worth $45 million in 2021. So, MP Materials Corp. (MP) is a stock to keep under insight.
Social Capital Hedosophia (IPOEU)
Social Capital Hedosophia (IPOEU) is moving forward with plans to merge with fintech up-and-comer SoFi. The following merger agreement values SoFi at $8.65 billion. SoFi provides various financial services on a smartphone app and is part of the wider growing fintech world.
SoFi’s flagship app has seen membership growth for six sequential months, as the company has forecasted 75% growth for this year. The company expects the total members to jump over 3 million by the year-end. As of last year, the net revenue was around $620 million. While the company projects its revenue to sixfold to approximately $3.7 billion by 2025. With things shaping up at IPOEU, investors should keep their eyes on the stock, as the stock is under the buy zone.
Porch Group (PRCH)
Porch Group (PRCH) is a leading vertical software platform reinventing the home services industry. The company has been in action recently following several merger deals going around.
Summarizing things down, the company has made a definitive agreement to acquire Homeowners of America. This acquisition will help Porch in better serving the customers as a managing general agent and carrier. Moreover, the acquisition of V12 will accelerate the mover marketing growth strategy. And, the Tuck-In acquisitions of PalmTech and iRoofing will expand the firm’s vertical software network. So, overall, the company is growing its portfolio and aiming for long-term success.
In that premise, the company expects 2021 to end on a high with a revenue increase to $170 million, up by a whopping 134% year-over-year. Jim mentioning Porch Group (PRCH) said that investors can start buying Porch right here and maybe wait for a dip to buy some more.
