Fortune Rise Acquisition Corp. (NASDAQ:FRLA) announced in an 8-K this morning that it has mutually terminated its combination with crypto mining business VCV Power Sigma.
As with yesterday’s termination of Aesther Healthcare’s combination with United Gear, the merger was just weeks old, having been announced on May 3 with an outside date in November. The deal also included included a $500,000 breakup free if either side failed to fulfill certain conditions through the de-SPAC process, but this appears to have not been invoked and was not mentioned.
More likely, the sharp tumble in the crypto market caused both sides to see this transaction in a different light. VCV provides computing infrastructure for crypto and Web3 networks and it plans a major expansion of bitcoin mines on its platform over the next three years.
Bitcoin’s (BTC) value has fallen -36.8% to about $23,684 since the deal was announced. This includes a recent rally from severe lows it hit in late June, but that is still well below what the parties expected.
The financial projections in VCV’s investor presentation accompanying the deal’s announcement were based on the assumption of BTC prices at $42,000. This was somewhat optimistic as it was 9.6% higher than BTC’s trading price even then at the time of the announcement. Nonetheless, VCV projected it would still turn $65.2 million in EBITDA in 2023E at BTC prices of $25,000 (about 5.7% higher than the current price).
But, the state of the market is likely enough to give the sellers misgivings as well. The five crypto companies that have completed de-SPACs – SAI, CORZ, BKKT, CIFR, and EQOS – closed Tuesday with an average price of $2.43 amid the downturn.
Fortune Rise has a transaction deadline on the horizon on November 5, 2022, but can extend three times for three months each in exchange for a contribution to its trust, which should give it enough time to complete a different deal.
In January 2025, SPAC teams continued extending beyond their third round, with one SPAC notably reaching its seventh extension vote as they searched for suitable deals. The month saw five announcements, marking the highest level in recent months, while only four SPACs held completion votes. Extension Votes In January, 14 extension votes were scheduled, representing...
At the SPAC of Dawn February is set to start with the jolt of a new potential trade war in North America. While some observers had expected tough trade action on China, the incoming administration’s decision to begin with 25% tariffs on the US’ biggest trading partners and neighbors, Mexico and Canada, and tariffs of...
Terms Tracker for the Week Ending January 31, 2025 Welcome to our weekly column where we discuss the findings from our IPO terms tracker based on the previous week’s pricings. This past week saw three new SPAC IPOs price, bringing the January and year-to-date IPO count to eight and underlining an active start to 2025....
The shortest month of the year nonetheless features new liquidity events for nine SPAC sponsors and 10 de-SPACs that at least a trio of which can be excited about. The de-SPACs being released from lock-ups this month with most to gain will also in most cases be the ones that will have to wait until...
Fifth Era Acquisition Corp I (NASDAQ:FERAU) has filed for a $200 million SPAC to potentially make another run at a blockchain or crypto transaction after the team’s first attempt fell short of sealing a deal. The new SPAC is offering investors a right to a 1/10 share in each unit, but it is not overfunded...