LAZR Monster Deal1h 3m | Nov 10, 2021
On Today SPACs Attack Chris & Money Mitch talk about all the latest SPAC industry top movers.
Interview with VPC Impact Acquisition Holdings III, Inc. merger partner, Dave CEO, Jason Wilk (NYSE: VPCC)
Dave CEO, Jason Wilk
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How we doing traders? Welcome to the one, the only the spacs attack. And yes, we missed yesterday. There was monster moves out there. So we'll talk all about them right here on the specs attack. You guys give us a thumbs up and let's get the show started.
Welcome back traders. Let's go ahead. Let's bring on the brains to the show. Chris catchy. What's going on? Happy Wednesday to you. Yeah, no show yesterday. Benzinga FinTech awards. I know I enjoyed those. A lot of great insight from FinTech companies on what's ahead for retail traders. So definitely enjoyed that.
We got a jam packed show today, though. We got feel announcements today. Yesterday, we got earnings yesterday. Today we got earnings later tonight to talk about, we got a monster move yesterday and we of course have an interview to get into as well. Of course, like always, we're going to get into an interview with Dave banking for humans.
If you want to find out all about Dave, stick around, we'll get into that interview after our headlines. Let's go ahead and knock out some of these headlines. I know there's a lot to talk about Chris. So Chris is going to be going through it. Step-by-step this is where you guys get the information for the day right here on spec tech.
So Chris, take us back to those headlines
All right guys. Yeah, a lot to get to today. We'll try to break it all down for. Starting with rating, uh, upgrades and initiations. We have Fisker FSR credit Suisse, initiating coverage yesterday with an outperform rating and a price target of $32. A nice call out here from credit Suisse. Uh, I am long Fisker again, they have the auto show later this month, so definitely a catalyst to watch.
And then we have skin S K I N the beauty health company, da Davidson maintaining, uh, by raising the price target to $32 company did have earnings last night. I'll get to that in a little bit. D M Y Q, which is merging with play at Northland capital initiating with a price target of $16. This is I think the third analyst now to issue a, a rating on planet pre deal close.
So a definitely an interesting one, again, a Niccolo DiMasi spec that we know well here on the show, but a nice $16 call-out today. And then a couple Eve players, lucid motors, El CID, bank of America, raising the price. From $30 to $60. So $60, the new price target from bank of America in a new, a call-out of EBV names to watch.
And then also a raising the price target of Fisker bank of America. That is from $18 to $24. So two notes on Fisker over the last two days and lucid the $60 price target. Uh, so some nice, uh, analysts notes out there and then turning to our big news yesterday, uh, L a Z R. So this is Lou Minnaar a LIDAR company.
It was announced that they were selected for the Novidium drive Hyperion autonomous vehicle reference platform. So their long range LIDAR solution is part of the best in class sensor suite to help deliver safe, highly assisted and full self-driving capabilities. Um, so again, the video, a leader in the chip space, artificial intelligence software is partnering with Luminar with their LIDAR technology level three highway driving configuration.
This could be a big deal, right? If a lot of companies partner with either Luminar or in a video in the autonomous vehicle space, that's an area that we have talked about a lot here on the show. Um, so L a Z R the big leader yesterday, we'll take a look at that, uh, chart later on today, and then turning to earning so many companies D specs reporting earnings over the last couple of days.
Uh, today we have wheels up ticker UPP, third quarter sales, 302 million up from 194.8 million in the prior year. Then we have V go one of the high flyers earlier this week, uh, Eve go third quarter sales, $6.2 million, speeding a street estimate of 5.4 million, and they see full year revenue hitting a range of 20 to $22 million versus a street estimate of $20.3 million.
One of our big gainers today, stem, uh, energy storage company reporting third quarter sales of $39.8 million. Beating a street estimate of $35.9 million company achieved a record revenue record gross margin record backlog record pipeline, and record assets under management. Their 12 month pipeline. Now $2.4 billion up 41% from the prior quarter.
Um, so that backlog and pipeline looking very strong for stem. Uh, keep an eye out on stem if it's not on your watch list here. And as I said, the beauty health reported earnings, tickers skin S K I N. Uh, they had sales of 68.1 million compared to 34.6 million in the prior year period. They raised their guidance from a previous range of 230 to 240 million for the full year new range.
Now 245 to $255 million company did announce that their C E O uh, Clint Carnell will be stepping down. Um, so that was, uh, reacted to negatively by investors. Last night, we have shares down 9% today. Now still trading at $26. Um, one to keep an eye on and remember that analyst note, raising the price target on the stock money lion, ticker, M.
Reported third quarter sales of 44.2 million beating an estimate of $40.6 million Moneyline and a FinTech play has been trading under $10 since that merger was complete. Um, so maybe earnings can provide a new lift there. Uh, G M I, I Gore's metropolis two, which is merging with sander holdings. Third quarter sales, 67.5 million up 155% year over year.
Also raising full year guidance from a range of 180 to 190 million new estimate, 200 million to 205 million. This is a hospitality reopening play G M I I, the ticker trading at 9 98. Right now offering a nice risk reward here with those strong earnings in that raise guidance. So keep an eye out. G M I, the ATI P one of our big leaders today.
Um, they reported revenue $159 million in the second quarter compared to 164 million, uh, in the previous year. But up from 148.7 million, uh, so something to keep an eye on there. Um, you know, this has been one of the decliners, right? Uh, trading under $4. We are getting a lift now today, though they did see visits per day increase on a year, over year and quarter over quarter basis.
So, uh, one to keep an eye out, uh, but again has been a layered out there. A former spec Metro mile, M I L E is getting bought out by lemonade. So lemonade will acquire a Metro mile in an all stock transaction, $500 million valuation. Uh, so this one's going to get bought out under $5. Um, and remember this was $10 when it went public via SPAC.
Uh, so something to keep an eye out on the air, um, again, a laggard in the industry and for SPACs, um, but could start a trend of companies getting bought out after the DCE back. If they do not trade over that $10 mark, then we also got some mergers terminated. So BBQ guy is terminating their merger with Velo V E L O due to supply chain factors that are affecting the business.
And the timing of the closing of the transaction HCIC merging with plus also terminating their business combination. So two deals terminated this week. We did get a vote date set for SVO K with boxed, uh, December 7th. So we do have a handful of companies already announcing those December dates and then turning into deals yesterday.
We got a deal for hugs, H U G. They are going to help bring Panera public restaurant company, Panera. This is going to be a interesting combination that could see some scrutiny from the sec. Um, so hugs who counts Danny Meyer as their chairman. He's the founder of shake shack. Uh, this pack is going to help bring Panera public via traditional IPO.
So hugs shareholders will be issued Panera common stock at a ratio of $10 divided by the public offering price. Uh, again, we could see some interest from the sec on how this deal is structured, but if it goes through, this is going to be an opportunity for investors to get early access to the Panera IPO via the spec.
So Panera brands has over 4,000 locations worldwide, uh, 2,120 Panera bread locations in 48 states and Canada. They also own caribou coffee, 713 locations in 10 countries and Einstein bros bagels, a thousand units in the U S Panera was publicly traded for 25 years before being bought out by J a B Panera has expanded their omni-channel growth.
They get 45% of their sales from e-commerce. So a high growth area there, then a deal announced today. CPT K announcing a deal with Bravo, which is a global leader in cloud-based access control and smart building tech. This is a SAS play connected devices. I'm not familiar with this one as much, but the company serves, uh, over 44,500 enterprise.
Commercial real estate and multi-family accounts and has over 23 million active users. They expect, uh, $417 million in revenue in 2025, a compounded annual growth of 55%. They are the single, single largest access control system in the world. Um, so again, they, they work with whole foods, DocuSign and other companies.
So one to keep an eye out on here and then our other big deal announced this morning, a announcing that they are bringing Presto public. So Presto, um, is a restaurant, a technology company think tablets, right where your server takes your order or tablets on the table. A pipe of $70 million did include investments from a franchise groups for young brands, Applebee's Outback and McDonnell.
Company was founded by Ray Rojat Surrey, who is the co-founder of lift. So something to keep an eye out there. If you know the restaurant industry right now, you know, there is a labor crisis and this is a company that said they can help with margins and help with labor, um, using technology. Uh, so this is one to definitely keep an eye on.
We saw toast go public earlier this year, Lightspeed and Olo have gone public. Those restaurant technology stocks have gone up significantly, uh, Presto add 2020 revenue of 26.1 million. They see revenue hitting 30 million in 2021 and growing at a compounded annual growth rate of 94%. The merger between embark and N G a B was approved.
Uh, that's going to trade us ticker, E M B K, beginning to market. And then just a note out here, um, from our friend Daniel Johnson on Twitter, Metro, we've been saying for months, right. We needed to see more spec deals get announced in September. There was 12 SPAC mergers in October 11 announcements. And in November, in 10 days, we have already gotten 10 announced mergers.
So, uh, definitely, uh, seeing that trend increase though. What do you think of that, Mitch? Are we going to see a lot more deals now, uh, with some of these stocks trading favorably on the definitive agreement? Of course, you know, that always helps it. Um, you know, one thing that we've been looking for is for definitive agreements to come back and being a factor, right?
I mean, for a while there, it just, wasn't a factor. Even when you got the agreement or you got rumors of deals, it wasn't moving the stock. Um, so now it's very important. We're paying attention to those, uh, definitive agreements. And when you continue to look to see if we get the agreements to continue going up and showing you that what the specs took a second there, they took a time out.
I said, hold on a second. Okay, now let's go ahead. Let's go back at it. Let's get back into the fire into the fire. And so we'll see if, if we continue seeing this, um, I think you're going to continue seeing that there'll be some winners, there'll be some loses. And now it's the time. Now's the time to really start looking at these and then figuring out which ones make sense to you at the price point that they're at.
All right. Definitely. Uh, uh, it looks like we're waiting on our interview here, Mitch. Should we get into the watch list or anything else from the, the news there? I know the mile buyout is something we talked about off air, right? Uh, Metro miles traded under $10 for a long time. They have great technology that pay per mile insurance, and it looks like lemonade and insurance company decided, Hey, if this thing's going to keep trading under $5, we're, uh, we're going to snap up and buy it.
Um, because the due diligence is already out there. Right? The financial projections are there public. Like, that's one of the advantages. Now, if you're a company looking to acquire, if you buy a company that already went public via SPAC, there's a lot of information out there. What do you think, Mitch? I think you had a chance, you know, uh, we were looking at this, I was even looking at this yesterday to make a buy.
When I heard the news, the news hit the tape and it was still trading at 3 26. You'd already be up towards three forties. So I think it was, you had a chance there, you know, uh, not, not many times. Do we get a chance to get a stock that comes out with a catalyst or something? I still would've played this to the upside.
Um, it still has a chance to keep going on up, but we'll see what happens. And then what you're going to see is that I think in Chris and I have talked about it, a lot of these, these facts that are down towards the say under five are going to be really. Uh, acquisition targets for bigger companies because they can get them on the cheap now that their valuation has come down there and they're able to go ahead and come after them looking for the upside.
Uh, that's what happened here in mile, all the way down towards $3, looking like, okay, there you go. Now we can get it out of the discount lemonade, stepping in at the right time and taking it right under our feet. Uh, the last one I want to talk about, um, we can go ahead and we'll get into our interview next.
Um, but I do want to talk a little bit about L a Z E R and then the video deal. And if you feel that we're going to get other deals out of this, uh, do you think that others might react after seeing a deal with uh, Navidea I know I still haven't heard maybe at deal with a M. Uh, and some other on some other one, you know what I mean?
Like, I think you're really starting to step into that where you could start seeing partnerships come into play. Of course, Laz are also had a deal with it was Volvo, a big deal with Volvo that they would be using their technology and their vehicles. So what are you thinking, Chris for LIDAR and for other autonomous plays?
Yeah. Yeah. Great point, Mitch. Um, you know, I think that's something we're going to continue to see. Uh, I remember when Velodyne went public, uh, now ELD are, they had an investment from Ford, um, prior to the SPAC, merger Ford actually sold out of its position in Velodyne. So here you had, you know, a potential partner and investor who kind of, you know, said, Hey.
Thanks for the investment. We're going to sell and take our profit and probably partner with a different LIDAR company. Um, and that's what you're starting to see now. So Lumina partnering with Novidium and I think that's huge, right? Because the video is well-known for their chips, right. And as you see connected cars, you're now going to partner with a, in a video or an AMD, as you said, Mitch.
So I think you're right. You know, who's AMD going to partner with now, who's going to be their preferred LIDAR company. That's definitely a trend to watch, um, an area to keep an eye out. Uh, ouster another one, right? Oh, you S T you got AI up there on the screen. Um, there, there are several LIDAR companies and I think this area is going to grow, but there's also a lot of them to where maybe there needs to be some consolidation or you will see some, you know, maybe get left behind.
Right. And it's going to be a matter of who has the best technology who has the best price and who has the partnerships? Well Luminari is going to check the boxes now with that partnership within the video. So I'm liking that deal. I think we're still a couple of years away from that big Tam that they talked about.
Um, but I mean, that's a monster deal that a master partnership with a market leader. We'll have to watch a up next. We're going to be getting into Dave. So stick around guys. We'll be having Jason on in a second. It looks like we have someone in the back, which we shouldn't get them on. And just about thinking about two or three minutes here.
Uh, but ALST Aus Chris. I actually ended up making a slight, slight gain on this one would want to close the pre-market pre-market it was up there towards $8. It was up like 15%. Uh, overnight when the earnings came out, but then it turned back around, uh, with L a Z R and we've been watching LA Z are also still pulling back.
I'm still in this one, full disclosure. I'm still long. L a Z R a. I talked about it on Monday. I even talked about it on here that I went long and I mean, I'm looking for the nineteens to hold and they get back up there towards, let's say at least 22, but I think long-term, I mean, I I'd still want to be in this play now with the video connected to it.
I think you're going to see a lot of people end up. Up in the videos technology into their vehicles. And you could hear OEMs maybe take that route. Uh, so we'll see what happens exactly with these, but keep your eyes on all these infrastructure plays, uh, battery plays. Um, there's so much in play right now, and this is why I talked about it.
That these plays are not necessarily only just for right now. Uh, this is kind of like the new decade for us and where are we going to go to in the next future and investments? And that's why we do specs attack because we look at these. Yeah, we can trade them and then it can be trading stocks, but.
Majority of these are more investment stocks looking for that long-term gain high growth and revenues that are really far out, but also far out in what in time. And so that's why I I'm keeping an eye on these. There's a lot that you could have taken some investments when they were in the lows, in the S in the bear market.
I'm going to call it the SPAC bear market of March through, uh, we'll say what three September Chris? Yep. I would say yeah, early September we started, I think turning around the end of September if I remember, right. Yeah. I that's the way I see it too, you know? Um, and, and we went through that bear market and now we're kind of in that area where we could get another bull run and that's what we're looking for.
That's what we're going to keep an eye out for. That's why you see so many of these monthly charts have changed and you'll see a big green camp. Let's see if we get another monthly candle on top of that to be green also. Um, that's what we're going to do. And we'll keep an eye out. A lot of stocks trading up today.
Uh, some that have earnings today. I mean, The list goes on and on today, right? Yeah. There's so many companies today in several of them. I actually, um, own position then over the next couple of days, uh, tonight we've got, uh, evolve hippo 23 and me I'll let, uh, pro Terra, which I own shares of right. Uh, electric vehicle company, uh, that one, you know, had a big pop earlier this week.
Um, that's an interesting one. We've got app harvest, which if you remember. And the app harvest rival was going to go public via SPAC and they called off their deal. So app harvest could have some favorable comments talking about competition tonight. Um, I'll let, I mean, there's going to be a lot of eyes on that one, Metro, right?
Because they got the, the, um, the call-out from the FDA on their SOC not being approved. Um, we should get an update. We should get an update from the company on the timeline. Right. And what they're doing to address how long maybe that product will be off the market. Um, HIMS and hers. I mean, come on, they added Miley Cyrus, Rob ground Koski as, uh, you know, uh, uh, spot or speakers for advertisements.
Um, what is that doing? Is that actually helping the brand, right? Is it increasing, you know, orders? Could they be a Christmas play? I think you mentioned that earlier, Mitch, um, you know, that maybe this could be a holiday play and maybe we'll hear from them. If they have promotions tied to the holiday season and open.
Uh, you know, Zillow, uh, exiting the home, buying business. That's open doors, uh, bread and butter though. I think we're going to hear from them that Zillow getting out is not bad. It's going to actually be favorable for the company. So, uh, I'm looking forward to that call and then we've got BarkBox we've got so fi we got tattooed shaft.
Um, just so far is a big one match, right? Uh, SOF I am long we've. We've had a nice run over the last couple months since I got in. And you know, the big question is going to be the bank charter. Right. And I don't know where necessarily going to get that announcement. But I think someone will at least talk about it in the Q and a, and maybe we get some color on to when they're expecting that to be announced.
Um, so that's interesting and BarkBox, I mean, Rover had good earnings the other night. So, you know, we, we talked about that earlier this week, right? Is BarkBox a sympathy, played a Rover or because, you know, they're subscription based, you know, could it be completely different, um, you know, where they could actually have a bad quarter versus Rover having a great quarter.
So, uh, some interesting names. What are you watching out of these names match? I mean, so many companies reporting tonight, uh, including all these dispatch. All right. So I'll go back to the first list here. So to me, what stands out on this? One, of course you guys know of long outlet and why am I long outlet as I'm expecting eventually to hear that?
Yes, we are in the process of working with the FDA to get our SOC to approve, and we should look forward to that going through. Course there's no guarantee, but that's the statement that I want to hear in the earnings by here, that statement, I could see the stock moving up 20%, just off of that. It doesn't guarantee that it's going to come back into play, but the amount of discount this stock got because of what happened with the FDA.
And, and this is why I went after it is that the fundamentals don't make sense now. And they don't make sense because they're making decent money, but not getting. That PR that premium because of that money. Right. And so w we're going to see their earnings, their earnings sort of gone down, but maybe they release a good catalyst with a forward-looking statement.
Like, Hey, we're working with the FDA to see if we can get this stock approved. And for now we're going to do this. And this that's what I'm paying attention to. We'll see what happens without let Proterra, of course mentioned, look for government mentions. Uh, government help is what I think needs to be done to really get these off, off the feet.
Um, let's say like, if you hear credits or something like that being mentioned additional help being put towards them. That's what you're looking for. App harvest is another one that I'd look for potentially eventually looking for a buyout. I could see APH being a buyout, uh, because it's getting towards those levels where.
It wouldn't make sense for even a company. Like, let's say a big company step in here, Chris and Walmart be like, you know what? We see this going into this area. We see us going into this in the long run though. They have more data than probably even APH on this and they could make a move. So I'm not saying that that's going to happen complete rumor, that I'm just fabricating right here, but more along, just letting you know, like, Hey, keep these on watch.
This is the reason why they're attractive. And especially when they get to a certain price, especially with high growth outlook. They're going to be attractive for stocks to come in here and just buy them out. So we'll see what happens with this one. Uh, with APH of course, take a look at the tattooed chef earnings.
And of course, beyond meat beyond meat could hit earlier the tape and cause TTC F to move. So that's what you got to keep that on. Watch today beyond meat also has earnings and we don't know which one's going to come out first. Um, I'd have to look at a tape to see when TTT, uh, CF has come out, but it says as a conference call at four 30, um, I, I'm not so not so sold on these.
I know Chris and I are not the biggest alternative meat fans, but, uh, I don't know. I don't know what happens to T TCF here. I think you will hear some inflation talk, some supply issues, um, that kind of talk, but we'll see what happens. Okay. Uh, I met, uh, it looks like we're still waiting on our interview.
Um, what about, uh, hugs that. Spec merger, right? Bringing a Panera public Pinera, caribou coffee and Einstein rose. Um, I, I'm not as familiar with, uh, you know, Einstein bros, caribou coffee. Obviously I know the names, uh, you know, but I, I don't eat or eat or, you know, partake in those products. I also, haven't gone to Panera in quite a while.
Uh, this is an interesting, um, you know, SPAC merger though, as it's going to, um, you know, help bring Panera public via traditional IP. But I I'm wondering your thoughts. You know, I just don't know if this gets approved by the sec, it's similar to bill Ackman's Pershing square, um, you know, to, to bring universal music, uh, public.
What do you think Mitch? Uh, you know, are we going to see this deal get approved or, you know, is the sec going to be like, wait a second, you're a SPAC. You bring a company public via SPAC. You don't get to bring a company public via IPO. Uh, you know, this was a complicated deal and I don't think complicated deals are favored right now.
No, definitely. Why, because who gets usually left out of complicated deals, right? It's the one that is pressing on the sec right now to make sure that they make these investments as let's say fair playing level as possible. And so to us that would mean the retail trader is the one that gets left out of this information.
And so for here, I would say. I mean institutions, they got like hundreds of people that could be like, you'll figure this out, you know? But when you're a retail trader, what do you have? You only have one brain. Right? And so for here, I say, you probably see a change. I don't think you'll see, go through personally.
I just don't think you'll see it go through. If they do want to make it go through, they're going to have to change around the structure. Like Chris mentioned and adjust some things for it to actually go through. We saw P S T H. It looked like it was going to go through even did a couple of days and all of a sudden, what did they do?
Pull that plug. Yeah, the timing's weird to me too. Right? Panera hasn't even filed for an IPO. So like, I could see it if Panera had filed for the IPO and let's say, you know, they were going to go public next quarter. Right. But Panera hasn't even announced this yet. Like this spec deal pretty much. Let the cat out of the bag that, Hey, Panera's going public.
And I just don't think the timing's going to work out on this. So, I mean, I'm not in hugs. Uh, I think the opportunity to get into the Panera IPO early could be, you know, advantageous, but I just don't know if this is going to get approved. Um, you know, it's just one of those complicated deals out there also then the warrants become complicated, right?
Because the hugs warrants transitioned to Panera warrants and that just causes confusion. And I mean, look at P S T H it not only got, you know, scrutinized by the sec, but shareholders said, Hey, we're out a window. We don't want to be involved in a complicated deal. So, uh, I, I just don't know about this hug deal.
All right. The last one I want to talk about, uh, let's, let's take a step back to the earnings. So earnings we got out by, uh, so there's going to be earnings. Of course, bark bark is going to have the earnings tonight, but Rover came out with earnings and we were talking about it. Is there a relationship there?
Is there not a relationship there? Let's take a look, right? I mean, at the end of the day, we wanted to talk about it. We wanted to take a look at it and see what we were going to get. I'll go ahead and I'll pull up both charts to see if actually, you know what I can do. I can overlay it. I'm going to overlay it here.
Uh, compare to I'll show you guys what you guys can do. You guys can do this on Benzinga pro when you pull up a ticker, let's say you want to look at the relationship. So you've put the ticker, right? I put Rover. Now I want to add a symbol here. Um, so I'm going to add a symbol and I'm going to look for what we're going to look for bark to see how it, it trades with it.
Right? So I'm going to overlay it on the main. Now you see that orange line that's bark, right? And so we want to see how it reacted with the Rover news. Did it pop up on the Rover news or did it kind of stay trading in its own little thing? And if you can see they kind of trade similar, you see when it goes up and it comes down, levels are getting near the same area and now it's starting to return to the upside.
So what you could see is Rover might be the leader in the industry because it started to push first. And now you want to see. Earnings be good and follow it. So you want to see a spike above this 10 50. Um, and we'll see what happens in bark. Uh, I can take a look here at specifically bark and see if we get that lift that we're looking for.
Uh, so here you guys have bark. It's been trading right now at 7 37 fifties. I'd be looking for an earnings report to take us above seven sixties. Risks would be on his downside six seventies. Uh, well, he we'll see what happens with bark after their earnings report today. Yeah. And I mean, barks a subscription business.
Remember they are getting more products into stores like Costco and others. So that would be the item I would look for on the earnings report. Right. Is what does their retail revenue look like? Their non-subscription based revenue also with bark. You know, what's their acquisition costs, right? That's something we talk about on the show, sometimes sports betting companies, right?
They pay a lot of money to acquire new customers. This is something Netflix did for a long time, right. In order to get new customers, they sent out, you know, mailers, right. Traditional mail offering, you know, a free month of Netflix and then, you know, a to get you to sign up. That's something BarkBox spends a lot of money on.
Right. They spend a lot of money on customer acquisition and that's something that could be digested, uh, you know, from the, the news tonight. So, uh, that's another area to watch, uh, with BarkBox. All right. So, uh, let's go ahead. Let's take a look here at our watch list. Looks like we're having a little bit of issues with our guests.
Uh, looks like they came in and they turned the camera on, but we're not seeing the camera on right now, so we're not going to bring him on, uh, let's. Let's keep going through. It looks like there you go. It looks like we got Jason in here. There you go. Looks like we have them. Give me a thumbs up, Jason, if you're ready.
Hey, there you go. I see the thumbs up. We're all good to go. Let's go ahead, Chris. Let's get into our interview here with Dave. I'll let you take over. Awesome. Well, uh, joining us on SPACs tech. Another exclusive interview here we have Jason Welk. The CEO of Dave company is merging with VPC impact acquisition holdings, three current ticker VPC.
See upon merger completion that new ticker will be Dave D a V E. Jason. Welcome to specs attack. Hey Chris. Great to be here. Thanks for having me. Of course. All right, well, let's dive into questions. One of the first things we always like to know here on specs tech is, you know, why the decision to go public via spec merger and was a traditional IPO also considered by your.
So the decision for us was quite easy. We had the most primitive FinTech investor on the planet tiger global that offered us $150 million pipe paper to go down the public, uh, route. This is pre us even having a sponsor. And so when you have somebody of that magnitude gave you that kind of competence going into, you know, what was at the time of very weak pipe market that gave us all the competence we need to, to want to go for the public markets.
We knew we had the money. We knew we had a, uh, a valuation that was validated by, by one of the best in the business. And we went out to find our, our preferred spec sponsor, which was also an easy choice with victory park, who was a long time debt investor in the company and equity investor. They've known the business since, before I even started it.
And they've also, you know, are now a, a repeat spec successful sponsor with back, which is, uh, I think up 300%. Definitely. All right. So, uh, you know, some people out there may not know what Dave is all about. So let's dive in and hear more about this company. So Dave has a mission of creating financial opportunity.
That advances America's collective potential. Break that down for us. Jason, what does that mean? And why is that mission so important to the company? No more simply said we're just out here to level the financial playing field for the everyday American customers are getting hit with $30 overdraft fees at their bank still, which is, which is crazy.
$30 billion a year spent on overdraft fees for everyday customers, mostly affecting, uh, people who are middle income. And we just think that that's, that's just not fair. Yeah. Everyone knows that feeling of going to get a cup of coffee and then seeing that $34 charts in your bank. And Dave's, Dave's the first company ever to just eliminate.
And we decided that instead of hitting people with these crazy fees, we're just going to be the bank that spots you, that a hundred bucks for free to go buy those everyday essentials without, without dinging you and putting you into debt. And so that innovation alone, which we've seen other sort of challenger banks try to emulate, we really change an industry.
And we're going to continue doing that with other products in the space, the amount of interest and fees that Americans are paying right now, it's about $300 billion a year in short-term credit fees and interest payments, uh, which is about 30% of the average income of a they a middle-class American.
Perfect. So, uh, Dave launched Dave banking in December, 2020 has over 1.3 million members already, uh, you know, talk to us about this number. Is this ahead of where you guys thought you would be Jason or is this, you know, kind of right on path. Yeah, we, we had a wait list for a couple of years. We banking was our number one most requested features.
So just to give a little history of the business, when we started in 2017, the product was just a way for people to connect their existing bank account, we would immerse you about upcoming bills and they would spot you a hundred bucks. If your account's at risk of going negative. Our customers loved that product so much.
They wanted us to launch our own banking product, and that's what rolled out last year. So Dave banking, which is now the flagship feature of the company, this is the future of, of, of the business. And it's going incredibly well. And it's, uh, it's satisfying all the demands of our customers. And we're doubling down on all of our features next year.
So traditional banking's been around for, you know, a long time. Um, and you're trying to disrupt that market a little bit in this David versus Goliath battle. And of course, you know, the company named Dave. So talk to us a little bit about, you know, how David can beat Goliath in bed. Yeah. So when it comes to the major banks, we think that there's, there's a few major advantages to our strategy.
One is sort of speed of innovation. These big banks are moving incredibly slow. Dave is able to build products quickly with, with either ourselves or through these partner products. We don't have the huge compliance departments and the hundreds, hundreds of thousands of employees at these major banks.
The second one is around is around cost. I mean, we think that because of the huge bloated infrastructure of the banks, that's the main reason why they're charging these $34 overdraft fees and $15 minimum balance fees. They can't profitably serve the average American customer without those, but with Dave being a data and software driven company, we have over 11 million registered customers with just over 200 employees.
And that, that cost structure and advantage there leads to better prices for consumer. With we think is just deliver this incredible book that the banks are not going to be able to, to come after. So along with some of these, uh, banking features, uh, another product offered by Dave is a side hustle. So we hear a lot about the gig economy, right?
People getting a second job, um, you know, to do some, uh, gig economy things or, you know, just as another source of income, uh, talk to us about side hustle and how Dave is helping, you know, empower people in the gig economy. Yeah. So we saw two major gaps for the customers that we're serving one, they typically have a lower credit score.
And so we include a free credit building membership with day banking that helps you build credit by just paying your bills on time. So if you pay your telephone bill on time, that can finally help you build your credit, which is pretty amazing. The second one was side hustle, which we found that our customers are they're living paycheck to paycheck for the most.
The majority of Americans live paycheck to paycheck. So there's nothing wrong with that, but we wanted to help members put more money in their pocket. And we saw an opportunity in our data that quite a few members were discovering these gig economy, jobs like Uber and Lyft, but with the explosion of gig economy, with all these different grocery deliveries and at-home surveys and at-home work, we decided to launch our own job board, exclusively dedicated to helping people make more money on the side.
And that's been a huge hit with over 3 million applications submitted and we can see in our data how much money our customers are making off these gigs. And it's in the hundreds of millions of dollars we've put back in our members pocket. So all that combined, you know, really goes back to that, leveling the financial playing field for everyone to get this great experience and not pay the crazy cost that you and I are not paying it.
Awesome. So as you know, Dave adds new customers and also adds out some of these new platforms, uh, and segments, you're seeing the average revenue per user go up. Talk to us a little bit, you know, why it's important to keep adding additional services and increase the average revenue per user along the way.
Yeah, we're, we're so early in our life from an ARPU perspective. And really we today have a very basic banking feature where you can, you have a debit card, you can send a check, you can, you can pay a bill. And then we obviously have our, our innovative extra cash product, which really eliminates overdraft by putting our money back in your pocket.
But the opportunity set in front of us to deliver more value for consumers with more choice across the board, from investing to protecting the landscape is wide open to, to continue to grow ARPU. And especially with that status shared at the beginning of the. $300 billion a year. The average Americans are paying in short-term credit fees and we haven't even cracked into short term credit yet.
So we think that the, the opportunity set is massive here to get this ARPU, uh, up significantly.
So talk to us, you know, just about the overall a Tam, right? The total addressable market size, um, you know, for some of the segments that the company operates in and also maybe headed in the future. Yeah. So we look at our audience at about 150 million Americans who are unable to set aside $400 for an emergency.
And that's the customer who is having a clearly, a difficult experience with their bank because they're not able to safely save, they're paying a significant portion of their income to interest and fees. And we think by helping to eradicate that. So, you know, sort of speed of innovation, cost of products that putting more money back in people's pockets will create more opportunity for these folks and getting them access to more financial products.
Yeah, the average customer who's banking at a community bank. They don't have access to great investing tools, advice. Uh, they're they're most likely paying too high of insurance costs and they're paying too high of interest on their credit card and, and, and feeds. So that's really where we see a lot of the upcoming value being delivered to our members.
And that's all stuff that's not even the product today. And we still had, you know, a hell of a 2020 with 122 million in revenue alone also will be incredibly helpful to our members. So we think we're, we're really well positioned to, to be in a great space and could not be more excited to be a public company we've grown this fast and have this much revenue with only raising 60 million of equity.
Which is pretty astounding. And so, you know, when we have the chance now to have several hundred million dollars of capital plus the public markets behind us, we think there's just great opportunity for the business. So along those lines of, you know, what's to come what's ahead, which is something, you know, investors will want to know once you're a public company, we have a slide, uh, talking about some of the future opportunities.
So we've got savings, social investing, and protecting. Uh, can you just talk a little bit about, you know, some of these new areas that Dave plans on entering and why investors should be so excited for these particular segments? Yeah, well, as I said, we, we really today have a very basic banking product. And so the fact that we don't have to have a savings account yet that's our most requested feature.
And so when we talk about savings and social, we want to really deliver a savings experience that can really help our. Uh, say, you know, the average customer, as we said, can not save for a dollars. And so we really want to, uh, tap into the sort of community to help members hit, hit the goals of the otherwise may not be able to hit on their own.
And that innovation we think will be very unique to banking is what we have coming up next from there. Uh, you know, we, we can't talk about the exact roadmap, but you know, we are seriously looking at things like investing and protecting, but having aligned on exactly which one. Yes. Awesome. And then, you know, uh, above that slide there mentioned M and a right.
So going public, you're going to have more access to capital. Um, talk to us a little bit, you know, MNA, is that going to be something to expand in existing areas, into new verticals or a combination of both going forward? I think it would be a combination of both. You know, you look at great opportunities out there.
You know, we're good friends with Dan over at Metro Miami, they built a heck of a business, but you know, consolidation in the market is, is inevitable for great companies that want to add more feature sets. So that's certainly one area. Yeah. They have their own insurance brokerage, and there's a lot of value there and tons of data.
So I can totally see why that, that acquisition, um, transpired. So I think it's a combination of, uh, one just getting access to more talent instead of super hot talent market right now for FinTech. So consolidation around feature sets and just getting more people into the business, uh, I think are sort of top of mind for us.
One of the things mentioned in the press release in the presentation was a Dave's commitment to community. Um, so having pledged over 13 million meals to feeding America since launch, uh, you know, talk to us about this mission and why it's important to give back to the community, uh, for. Yeah, community is a big part of our strategy at the company.
We think that getting customers to one, interact with their community through Dave, so that they're sharing their daily experience with others, 30% of our customer acquisition is actually from word of mouth. And so making sure we are getting that great, uh, community network effect is, is pretty significant for us.
And so in addition to that, we wanted to help our members who are potentially in a tough financial spot to be able to give back to their community and give them the opportunity to do so. And so specifically with our extra cash product, we don't charge any mandatory fees. We ask customers when we give them that a hundred dollars or $200 to go buy gas or groceries without charging those crazy $34 overdraft costs, we let customers pay what they think is fair for that.
So, and that comes in the form of a tip between zero and 15%. It's often not a great big tip, but for every percent somebody does give us, we, we pledge a meals at feeding America and that helps our business, but it also helps our customers feel good about, uh, giving back to others when, when they were also in a time of deep.
Awesome. And then you mentioned 20, 20 revenue of 122 million up 60%. And the financial projections from 2018 to 2023 compounded annual growth of 98%. Can you talk to us a little bit, you know, uh, how is this broken down in terms of organic growth from existing business lines and then from growth of some of those new areas that Dave plans to enter in the coming years, this is primarily driven by our core businesses.
So banking and, and extra cash. And we're not factoring in a lot of additional products here in the financial sector. Again, it just goes back to, we think that the growth potential here is significant with our ability to go and build the brand and build a household name with the capital that we're going to be bringing in the amount of customers we've acquired so far with such a little amount of money.
We have almost every dollar we've ever raised in the bank still and have achieved this level of success and scale. So that was a good cost. The comfort that the outer years are going to continuously, uh, bear a lot of fruit. As more people start to trust that digital banking is something they can really trust with their, their primary financial paycheck.
And we're still very in the very early days of that for all players in the industry. But we are going to cross a threshold soon because the, the premium experience we can deliver to customers at the affordable cost compared to these major banks is going to be continue to be unprecedented compared to these legacy.
Um, I'm very excited to disrupt the space. All right. I'm going to go ahead and jump in here with some of my own questions. Uh, so one of the things to answer, I mean, I just got to state it as easy as possible. So how do you guys generate revenue? So one of the main ways to generate revenue, which we love is through interchange fees.
So every time our customer takes their Dave debit card and goes and buys DAS, we aren't getting paid from that, from that merchant one to one and a half percent of every card swipe. So we're making money at the same time that user that's swiping that card right now, we're offering Dave customers, uh, cash back.
Every time they swipe their card. So our customer is getting a discount and Dave is actually getting paid for that transaction. So it's sort of a business model that aligns itself very well with our members. The second one is around extra cash. We make money in two ways. Similar to Venmo and cash app. If you want the money instantly put on your debit card, we have an instant transaction fee for that.
And then additionally, we have the, the tip model, which both those, these are completely optional. So again, it speaks to this business model that is very on the side of the, of the customer, but at the same time, we're generating meaningful, meaningful, uh, revenue, just because of the sheer scale that we've gotten in the.
All right. So the next question I want to get into is about, of course, extra cash. You know, one thing is I was at one point like a college student and, uh, you know, we always are just counting our pennies and when we're in college. And so one of the things that you run into a lot is that sometimes you need just some extra cash, right?
Um, it may not be a massive amount. It could be something small, it could be $50, $20, uh, but just to get us through to the next paycheck. Um, so one of the products that you guys have extra cash does something very similar to this. I mean, it gives you up to $200 for those extra cash, uh, without the fees. So explain me a little bit more of this product and how someone let's say a college student or how you guys put in there.
I like the, the reference to hipster. Uh, so explain me this, how this works, Jason. Yeah. I mean, this product was really born out of my own personal gripes with, with banking. I mean, I was at a guy in college who, you know, forgot about my water and power bill or forgot about some upcoming expense. And then all of a sudden my account is negative five bucks and my bank just screw me with a $34 charge.
So that's, that was, uh, incredibly frustrating. And so when I looked around the industry in 2016, where we're going to build Dave, obviously the big banks are, are hurting people with these huge fees, but our competition, these neobanks that were out there in market, their approach to overdraft was to just decline your transaction and to say, you know, you can't afford this transaction.
We're not going to charge you a fee, but you also can't buy it. And I, I also thought that was incredibly unfair for people who are trying to get into a better financial system. So what, what we did and what the innovation that they realized was that overdrafts actually an amazing thing. It's just that people hate the feats.
I mean, who wouldn't want to have extra cash to go get gas or groceries when you run out. And so that's really where the innovation came from the product to say, Hey, we're going to give you this money for free. We know you're good for it because our data engine tells us that you have some money coming in to your account in the future.
And so we think the risk is pretty low and we're going to just extend the money and then we're going to let you figure out what you think is fair to pay. So when we help you get home and out from, from work or helped you get to that job interview, is that worth zero to you? Is that worth 50 cents? Is that worth a couple bucks?
And it turns out that that works really well. Um, and that's the innovation that Dave really spearheaded in this. Yeah, definitely. I think, you know, it's something that a lot of us, especially when we're just trying to get off of our feet, uh, could definitely use and it's great to have access to. Um, so the next question I have comes a little bit of mixed something that I wanted to ask also from the chat we'd love pulling from the chat here.
So, and cow in the chat also, mark, em, talking about it. What about cryptocurrency? How could this be implemented into the future growth of the platform and what's next, Jason? Uh, it's hard to ignore. I mean, we've had, uh, mark Cuban's has been on our board of directors for the last five years and he's been pounding the table for years for us to engage with, with crypto and for us, we just, it's just about the right timing.
And so certainly something that we look at on a daily basis and there's many fastest to crypto. You know, just overall investing to, to defy interest, to, you know, cross border remittance. And we've got to figure out what's the right thing for us and our customers, what they're really looking for. Um, but it's certainly on, uh, you know, on our radar and, uh, we're, we're taking it seriously.
All right. The last question I have is of course, you mentioned a part of this, the credit building features that are now being added to it. Uh, can we continue to see growth here for, uh, kind of credit building features? Yeah, I think we, we might the idea to help people build, build their credit, but ultimately with extra cash, we, we already are helping people just get more money in their pockets in an unsecure unsecure.
And so again, while we see a lot of the challenger bank competition, all moving towards secure credit cards, I've never loved secured credit just because it, it ties people's money up, you've got deposits and it doesn't move the needle nearly as much as if you're actually using unsecured. And so, um, you know, we'd love to leverage the data that we've got.
We've actually issued 35 million extra cash advances to people since we started the company. So that wealth of information we think gives us a huge data advantage to, uh, actually use for, for, you know, doing greater, greater amounts of credit. That definitely I know in an environment where let's say, especially a user probably that is using Dave going through it, you know, looking at their paycheck, trying to get a little earlier, need some extra cash.
Excellent way to help them. I mean, credit building is definitely going to help them and teach them to get to that next level. I'm bringing Chris back. We got some questions also from the chat. Uh, Chris, do you want to know? Yeah. We had a lot of questions about crypto. So Jason, thanks for answering that. Uh, we got a question here from the chat, um, from mark and, you know, we talk about a lot of companies that go public via SBACK and Mark's comment, you know, is about several fintechs that have gone public via back that have, you know, fallen since the merger completion.
So the question is how is Dave differentiated from Payoneer money lion, catapult Paysafe um, so you know, what, what gives you, you know, strong validation that Dave is going to be, you know, a good company going forward for investors. If you care to comment on that, Yeah. So what from, from Vintech, I mean, there's been some sector is choose obviously surrounding, uh, InsureTech, which I think is drag drag.
Some of those companies down has been, it there's been some challenges around scale and just economics in general. I think what really sets Dave apart from the companies that were mentioned is that we are on heavily in that financial playing field for, for our members. And we've built a consumer brand that primarily is, is growing, uh, largely organically to our customers.
And with that deep product focus, I think having that, be that to be that go-to bank for customers in this country that really has their back and really helps them deliver that premium, affordable experience that they're not getting from their traditional bank is, is why people shouldn't invest in, in this, uh, this company, you know, there are still 150 million bank customers who are living paycheck to paycheck.
They're overpaying on fees. And as I said, I think we're very early days in the people really willing to switch over to their primary financial relationship over to, to this company. I think that Dave is at, we're also in the early days of helping customers sort of get back on their feet. And now it's about creating that financial opportunity.
And the competition that was just mentioned seems to be really anchoring themselves only to just keeping people on, you know, early on their feet. And that's very different from. Thank you for the honesty. Uh, you know, that was a great question there and a, you know, a great response, Jason. So, uh, we thank you for your time today.
So joining us on SPACs attack again, guys, Jason wealth, the CEO of Dave company, merging with VPC impact acquisition holdings, three current ticker VP CC, and upon merger closed. The new ticker will of course be D a V E as in Dave. Jason, thanks so much for your time.
All right there. Sorry about cutting you off a little bit there. Jason just wanted to bring you back off a boat. Chris. Interesting fact, I mean, at the end of the day, I've been hit with those overdraft fees. Right? I can tell you guys about a story really quickly. I'll I'll try to be quick about it. There was a one point when I was a young kid, I was about 15 years old and I had just gotten a bank account in bank of America.
And I just started using this account. I was using it for like the year and then I took some time off of it because I was going to school. You know, I was a young kid. Eventually what ended up happening is I started working when I was 16 and I started using that account, like back and forth. I ended up going to school and then I would only work in summer.
I'd have a summer job, right? Like everybody, what ended up happening is I ended up getting hit with. Uh, purchased it. I made, but a fee, a monthly fee that pulled me under the, the overdraft. Then they hit me with $35 overdraft fee. And not only did they hit me with one, they hit me with 10 of these every day, every single day until I noticed.
And you know, what ended up happening, Chris? It's a really sad story, but I worked the whole week as a, as a kid, 16 years old, worked a week, put a check that was like $171 into the ATM to end up owning the bank money still because of the overdraft fees. And did they want to, you know, help me out, you know, like take it away.
You know, I didn't young kid didn't notice it and it, Nope. It took my paycheck and more. And that's why I don't bank with bank of America no more. So PAC you lost my business. That just shows you why companies like this are needed. Right? I mean, at the end of the day, you, you don't want to be having that kind of worry as a young child worrying about if you're going to get overdraft to death, literally.
Uh, so it, it hurt me one time, Chris. Yeah. I mean, traditional banking I think is ripe for disruption. And you heard Jason say that, right? The David versus Goliath battle, uh, this is a company, you know, trying to, uh, empower the individual customer. And also, I love hearing the crypto talk, shout out to our chat for the questions.
And I know you wanted to ask about. Mark Cuban on the board. Uh, obviously Cubans, a big bullish, uh, you know, investor in crypto. Um, so interesting to hear those comments from Jason, but we will follow the progress of this merger, um, as it goes forward, we're out of time for today, but we got, um, the power hour coming up next.
So stay tuned. Everyone don't go anywhere. All right, you guys, where the hype meets the stock coming up next Benzinga live is going to be getting into some earnings report. You got an interview and stay tuned. Later on this week, I heard there might be a big, big spec interview on there. Total tunnel buddy, maybe expensive.
Maybe he'll give you the news. Go ACSM. Find out. See you guys next time on the specs on baby.
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