New Providence Acquisition Corp.

NPA Details

Announces Business Combination with AST SpaceMobile: New Providence Acquisition Corp. (NASDAQ: NPA) is a publicly-traded special purpose acquisition company, focused on creating a merger or a business combination with other business. On 16 December 2020, the company announced that it has entered into a business combination agreement with AST & Science LLC (AST SpaceMobile), to create a combined company with an implied pro forma enterprise value of approximately $1.4 billion. Upon closing of the transaction, AST SpaceMobile will become a publicly-traded company, and it will be listed on the NASDAQ under the symbol "ASTS". The combined company is expected to receive up to $462 million in gross proceeds which shall be used to fund phase one of the commercial launch of AST SpaceMobile's space assets. The transaction is expected to close in the first quarter of 2021.

Launched Plans for Space-Based Mobile Network: AST SpaceMobile, in partnership with Vodafone Group, recently revealed its plans to launch the first phase of its space-based commercial mobile communications service in 2023 which will transform mobile network coverage for the 49 largest countries in the equatorial regions.

Outlook for AST SpaceMobile: AST SpaceMobile continues to benefit from operating leverage and low maintenance capital costs via its super-wholesale, business-to-business model. With its extensive IP and patent portfolio, AST SpaceMobile seems well-positioned to address the $1 trillion global mobile wireless services market. Moreover, it is well placed to rapidly scale its revenue streams as it deploys its space assets for nearly complete global coverage. AST SpaceMobile is expected to achieve $1 billion EBITDA in 2024 and over $9 billion by 2027.

Projected EBITDA (Source: Company Reports)

Key Risks: AST SpaceMobile is exposed to the risks related to potential delays or technical difficulties in developing and establishing a global satellite-based communications system. Further, it is exposed to the risks related to the global economic conditions and continued effects of COVID-19.

Stock Recommendation: Being founded in the year 2017, AST SpaceMobile has a limited operating history, making it difficult to evaluate and predict the company‘s future performance. Moreover, in the upcoming two years, the company does not expect to generate any revenue from its operations. The stock of NPA has provided a return of 25.04% in the past one month. The stock has a 52-weeks low and high price of $9.50 and $12.79, respectively. On the technical analysis front, the stock has a support level of ~$10.8 and resistance of ~$12.77. Considering the aforesaid facts, limited operating history of AST SpaceMobile, associated key risks with the business of AST SpaceMobile, and uncertainty surrounding the impacts of COVID-19 pandemic, we suggest investors to “Avoid” the stock at the closing price of $12.65, up by 5.07%, as on 23 December 2020.

NPA Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Thunder Bridge Acquisition II, Ltd.

THBR Details

Business Combination with indie Semiconductor: Thunder Bridge Acquisition II, Ltd. (NASDAQ: THBR) is a blank check company, formed for the purpose of creating a merger or a business combination with one or more businesses. As on 23 December 2020, the company’s market capitalization stood at ~$515.77 million. On 15 December 2020, the company announced a business combination with indie Semiconductor (indie), a next generation automotive semiconductor and software innovator, to create a combined entity that will be named indie Semiconductor, Inc. and will be listed on the Nasdaq under the ticker symbol INDI. The implied equity value for the combined company is around $1.4 billion. This transaction will help indie in accelerating its growth initiatives and create an Autotech pureplay powerhouse. The transaction is expected to close in the first quarter of 2021.

Outlook: As per the company, the market for semiconductors is expected to exceed $38 billion by 2025, owing to strong demand for silicon and software content in automobiles. The business combination with THBR will help indie in addressing this growing market, and it will allow indie to capitalize on over $2 billion of strategic backlog and an additional $2.5 billion in identified pipeline opportunities. In the next five years, indie expects its top line to grow at a CAGR of 85% to approximately half a billion dollars. 

Revenue Projections (Source: Company Reports)

Key Risks: The combined entity is exposed to the risks related to indie's relationship with Volvo, and the related timing of production schedules and other key milestones. Further, the company is exposed to the risks related to the changes in the price of key materials and disruptions in supply chains for these materials.

Stock Recommendation: The stock of THBR has provided a return of 17.94% in the past one month. The stock has a 52-week low and high of $9.15 and $12.25, respectively. On the technical analysis front, the stock has a support level of ~$10.39 and resistance of ~$12.24. Considering the anticipated benefits from the business combination of indie Semiconductor, growing demand for silicon and software content in automobiles, large addressable market of indie, modest outlook, expected growth in indie top-line, and associated key risks, we give a “Speculative Buy” recommendation on the stock at the closing price of $11.96, up by 5.84% as on 23 December 2020.

THBR Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Disclaimer

PLEASE BE ADVISED THAT YOUR CONTINUED USE OF THIS SITE OR THE INFORMATION PROVIDED HEREIN SHALL INDICATE YOUR CONSENT AND AGREEMENT TO THESE TERMS.

References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.

This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332.

The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine is not responsible for material posted on this website and does not guarantee the content, accuracy, or use of the content in this site. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated.

Kalkine do not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional licensed financial planner and adviser.