Blue Water Acquisition Corp. does not have significant operations. It intends to effect a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The company was incorporated in 2020 and is based in Greenwich, Connecticut.
Yeah I bought this one on a tip and it's doing exactly that, read this 10 days ago:
I am buying BLUW. Vote is on 8/27. Here’s why:
Tiny trust - 57M
This SPAC is full of arbs who will redeem, meaning there will be an extremely low float after merger. Why do I say this?
The SPAC was an arb’s dream going into vote. Redemption was yesterday, meaning the last day to purchase shares and redeem was Friday, 8/20 (shares must be settled). Shares were trading at $10.11 on Friday and cash in trust is $10.20 – a high, easy redemption return.
Per their S-4 and Schedule 13’s, there are 5 arb investors who have a >5% stake. These 5 investors alone own 36% of the trust and will likely redeem their entire stake (arbs do not hold past merger). Go look on their websites and you'll see these guys are all in this for the arb (Sander Gerber for example is manager of the Hudson Bay Cap Structure Arbitrage Enhanced Fund)
r/SPACs - deSPAC Squeezes - Why they happen and my next pick (BLUW)
Largest BLUW Stockholders
There is no PIPE in this SPAC, so no new sellable shares at closing (new shares are being registered like most SPACs for existing investors and convertible noteholders in this case, but they are subject to a 180 day lock-up post close).
The stock is already acting funky
Stock is creeping up, hitting all time highs today despite NAV floor being removed.
Today the bid/ask on the stock was $10.20-$12.50 at one point and various points throughout the day the ask was in the 11s, indicating that liquidity is very low. Perfect recipe for a squeeze.
Warrants are up 18% today, leading indicator.
Company is terrible. They have already lowered guidance and indicated they don’t have enough cash to fund the commercialization of their product, a testosterone booster pill. Lack of PIPE further validates poorness of deal. Check out this Twitter post for more (twitter.com/RodriGo_ethe/status/1430608160411246594). In this case, poor target is better since it means higher redemptions and lower vote. And if there is water (pun) to the short squeeze theory, this is a great short target.
My expectation is that 90-95% of trust will redeem, putting the float an extraordinarily low ~280,000-500,000 shares. At that amount, there are probably individual retail investors on this forum who could move the stock single-handedly. We’ll find out Friday or Monday if I am right.
Risk: (1) if there is no squeeze, this stock will go to $4 quickly (2) if merger is cancelled like TWND, shares will go to $10-10.05 (effectively 9.80-9.85 with $10.20 in trust). SPAC only has until December before liquidation (or until May if they deposit another 10 cents in trust).
TLDR: SPACs are suffering extremely high redemption rates that create ridiculously low floats on merger. Momentum traders and retail piles on and drives these stocks up 50-500%. BLUW is one SPAC that will likely have very high redemptions and therefore low float, creating perfect set-up for a squeeze.
I am buying BLUW. Vote is on 8/27. Here’s why:
Tiny trust - 57M
This SPAC is full of arbs who will redeem, meaning there will be an extremely low float after merger. Why do I say this?
The SPAC was an arb’s dream going into vote. Redemption was yesterday, meaning the last day to purchase shares and redeem was Friday, 8/20 (shares must be settled). Shares were trading at $10.11 on Friday and cash in trust is $10.20 – a high, easy redemption return.
Per their S-4 and Schedule 13’s, there are 5 arb investors who have a >5% stake. These 5 investors alone own 36% of the trust and will likely redeem their entire stake (arbs do not hold past merger). Go look on their websites and you'll see these guys are all in this for the arb (Sander Gerber for example is manager of the Hudson Bay Cap Structure Arbitrage Enhanced Fund)
r/SPACs - deSPAC Squeezes - Why they happen and my next pick (BLUW)
Largest BLUW Stockholders
There is no PIPE in this SPAC, so no new sellable shares at closing (new shares are being registered like most SPACs for existing investors and convertible noteholders in this case, but they are subject to a 180 day lock-up post close).
The stock is already acting funky
Stock is creeping up, hitting all time highs today despite NAV floor being removed.
Today the bid/ask on the stock was $10.20-$12.50 at one point and various points throughout the day the ask was in the 11s, indicating that liquidity is very low. Perfect recipe for a squeeze.
Warrants are up 18% today, leading indicator.
Company is terrible. They have already lowered guidance and indicated they don’t have enough cash to fund the commercialization of their product, a testosterone booster pill. Lack of PIPE further validates poorness of deal. Check out this Twitter post for more (twitter.com/RodriGo_ethe/status/1430608160411246594). In this case, poor target is better since it means higher redemptions and lower vote. And if there is water (pun) to the short squeeze theory, this is a great short target.
My expectation is that 90-95% of trust will redeem, putting the float an extraordinarily low ~280,000-500,000 shares. At that amount, there are probably individual retail investors on this forum who could move the stock single-handedly. We’ll find out Friday or Monday if I am right.
Risk: (1) if there is no squeeze, this stock will go to $4 quickly (2) if merger is cancelled like TWND, shares will go to $10-10.05 (effectively 9.80-9.85 with $10.20 in trust). SPAC only has until December before liquidation (or until May if they deposit another 10 cents in trust).
TLDR: SPACs are suffering extremely high redemption rates that create ridiculously low floats on merger. Momentum traders and retail piles on and drives these stocks up 50-500%. BLUW is one SPAC that will likely have very high redemptions and therefore low float, creating perfect set-up for a squeeze.