Investors should buy CAPA SPAC shares before the quantum merger

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Blank check company stocks are becoming increasingly popular with retail investors looking for cheap stocks and an opportunity to grow their money quickly. SPAC stocks typically cost $ 10. Many of them have proven to be successful bets. For example, CAPA stock has gained around 130 percent since its debut in December 2020. The stock outperformed the S&P 500 by less than 10 percent over the same period.

Date of the merger of HighCape Capital (CAPA) and Quantum

The merger of HighCape and Quantum is expected to complete before the end of June 2021. Completion of the transaction depends on the outcome of the vote by HighCape SPAC shareholders on the transaction. Given the market reaction to CAPA stock, HighCape investors look happy with the deal and it should pass the vote.

The combined company will be valued at approximately $ 1.5 billion. Quantum focuses on protein sequencing. It has built a powerful platform that uses semiconductor chips to provide better analysis of proteins. Its products target the life science research market.

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Quantum is expected to receive a capital injection of $ 540 million. The amount includes $ 115 million raised in CAPA’s initial public offering and $ 425 million secured in PIPE deals. The funds will support Quantum in the further development of its products.

HighCape’s CAPA SPAC share will receive a new ticker symbol “QSI” after the merger transaction has been completed. The stock will continue to be traded on the Nasdaq. Existing Quantum shareholders will own approximately 61 percent of the combined company.

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ARK Invest buys CAPA SPAC shares before the merger

ARK Invest joined the group of institutional investors who gathered behind HighCape SPAC to bring Quantum public. It participated in the HighCape PIPE which raised $ 425 million in an oversubscribed transaction. ARK Invest and other PIPE investors will own 29 percent of the combined company.

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ARK Invest is an investment fund founded by Cathie Wood in 2014. He is worth more than $ 58 billion. In addition to the HighCape SPAC, Tesla is one of Wood’s favorite stocks. The fund continues to accumulate Tesla shares. ARK Invest believes the company will enter the hailstorm market to compete with Uber.

ARK Invest is also optimistic on Bitcoin. More shares in the Grayscale Bitcoin Trust (GBTC) were recently bought. Wood has commended Tesla and Square for the steps they have taken to invest in Bitcoin. Tesla and Square stocks were big winners for investors.

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Will CAPA SPAC stock be a buy before it merges with Quantum-Si?

Quantum is targeting a massive market opportunity. The proteomics market is forecast to grow from $ 21 billion in 2019 to $ 50 billion by 2027. The coronavirus pandemic has sparked interest in researching proteins, which is a potentially greater growth opportunity for companies like Protein Quantum.

Investors who buy CAPA shares now will end up holding around 8 percent of Quantum. Although CAPA SPAC stock has more than doubled from its IPO price, the downside risk appears to be minimal as a deal is currently underway.

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In contrast, SPAC stocks CCIV, ALTU and GSAH soared ahead of close only due to market speculation. For example, due to rumors of a merger with Lucid Motors, CCIV stock has gained around 480 percent since the start of the year. The stock could crash if the deal with Lucid fails.

The involvement of major investors such as ARK Invest, Foresite Capital and Redmile Group also appears to increase the credibility of CAPA stock as a potentially profitable investment. Leading institutional investors like this one do thorough due diligence before investing their money in an asset.

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