The demise of the Mudrick Capital (MUDS) , Topps merger is likely one that will be talked about for quite some time. The merger, seemingly a done deal pending this week's shareholder vote, went south in a hurry late last week when Major League Baseball announced it was moving on from Topps, instead signing a licensing agreement with Fanatics.
The timing of the move begs several questions, the primary one being how the merger of SPAC Mudrock and Topps, initially announced in April, got to the bottom of the ninth inning, with two outs and two strikes, before the bombshell news hit. Was MLB pulling the rug out from under Topps after 70 years a complete surprise, or had Topps and/or Mudrick considered the possibility? While Topps does have other businesses, the future without the MLB is rather murky at best. There's value in Topps confection business (35% of revenue), but to me that was just a sweetener.
Perhaps the markets were skeptical of the deal: MUDS jumped from about $10 at the time the merger was announced to the $18 range the following month, before giving most of it back the past three months. I was not interested in participating in the deal when MUDS shares were in the high teens, but began building a position later which averaged out to around $11/share, after putting the finishing touches on it last week. That seemed like a potential bargain at the time. Late Friday, I moved on from MUDS. I am not waiting around for the next deal. The one benefit of MUDS being a SPAC, however, was due to its nature , basically a pile of cash looking for a deal, and damage was limited after the news broke late in the trading day on Thursday. MUDS fell 2% on Thursday and another 3% on Friday.
I also closed positions in the other SPAC I owned, RedBall Acquisition (RBAC) , purchased last October. Call it impatience, or my growing speculation that there are not any great sports-related deals out there at this point, and that I'd be holding onto this slightly declining pile of SPAC cash forever. The demise of the MUDS-Topps deal certainly did not help matters, and was a catalyst for exit, right or wrong.
I am now SPAC-less.
