But there will be NO additional contribution to trust…
GigCapital, Inc. (GIG) filed their Definitive Proxy this afternoon and while there was always the hope that they would drop in an additional contribution to trust while it was still a Preliminary Statement, that hope is gone now. There will be no additional contribution for shareholders that do not redeem at the upcoming extension vote. Gig’s vote to extend their deadline from June 12th to December 12th, 2019, will take place on June 5th, with a record date of April 26th.
As a reminder, Gig had 15 months to complete a business combination, but extended an additional 3-months to June 12th, back in March. At that time, Gig contributed an additional $0.10 per share to trust for shareholders that did not redeem, per their Charter (they didn’t have a choice). However, at the upcoming June extension, Gig will now be asking for a 6-month extension. And no contribution.
These votes are getting very strategic and if we read the tea leaves as to why Gig is not offering additional funds this time around, it points to an intentional removal of SPAC shareholders via redemption. Why, you ask, would they want to do that? Perhaps to replace those investors with new PIPE investors. Seems like the most logical conclusion. SPAC Investors are generally not too keen on giving teams six additional months without a sweetener, so a near total redemption of the trust followed by a replacement via a PIPE is the most likely answer.
We still have five weeks to go until the vote, so things can still change. Stay tuned for any further updates.