Forum Merger II Corporation (FMCI)
Forum Merger II Corporation (FMCI) announced over the weekend that stockholders owning more than 65% of outstanding shares had submitted proxies voting to extend the company’s transaction deadline from September 30 to October 30.
Forum II faced an unprecedented situation last week as it announced it had convened and then adjourned its Thursday shareholder meeting without having received sufficient votes to pass the extension. With 61% of outstanding shares having voted, the extension received 99% approval, but this was nonetheless below the mandatory 65% threshold.
The company will proceed with its rescheduled special meeting for 9:00 a.m. September 30, 2020 when the votes will be officially recorded. Shareholders may still vote until 11:59 pm ET Tuesday, September 29.
So… What happened? One plausible theory is issues with the retail crowd. Currently, FMCI’s shareholder base is comprised of ~23% institutional investors, so the vast majority of its shareholders are retail. Retail continues to grow to a larger share of the SPAC investor base, especially so when the target is consumer facing and well known like Itella International, or the “Tatooed Chef”.
Many of these investors might be unfamiliar with the proxy process and might have misunderstood how and when to cast a vote. Another theory is that there were technical issues with the voting process. A quick review of Twitter shows a number of people stating they experienced multi-hour wait times on the phone, possibly preventing many from casting their vote
Regardless, this is a new risk that teams now need to consider. The good news for FMCI is, they had some cushion as far as time before they run out their clock and therefore were able to adjourn to the 30th. In a nightmare scenario, they could have scheduled this vote on their deadline day and then not had enough voters, which would have resulted in a liquidation.
SPAC Insider analyst Eric Weidemann contributed to this report.


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