HighCape Capital Acquisition Corp (NASDAQ: CAPA) announced yesterday their intentions to merge with Quantum-Si, a leader in Semiconductor Chip-Based Proteomics. Simply put, Quantum-Si have developed a semiconductor chip that potentially has the power to decode the molecules of life. Furthermore, this holds the “potential to advance drug discovery and ultimately diagnostics beyond what has been possible with DNA sequencing.” The merger is set to generate Quantum-Si $514 million in cash proceeds to fund future growth. In addition, HighCape Capital (NASDAQ:CAPA) stock surged upon news of the announcement, increasing over 115% on Thursday. This article will breakdown everything you need to know about the CAPA – Quantum-Si merger.
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Key details on CAPA and Quantum-Si merger
Firstly, the equity value of the business merger is estimated at $1.46 billion pro forma. The SPAC merger will provide the combined business $425 million from PIPE investors with another $115 million currently held in HighCape’s trust account. The company is expected to have $514 million on the balance sheet post merger. In addition, the merger is set to close in the second quarter of 2021 (between 1 April – 30 June).
Upon completion of the proposed merger, Quantum-Si will trade on the NASDAQ under the new ticker QSI. Investors will be able to purchase QSI stock directly post merger. Investors already have shown their genuine bullish sentiment after CAPA surged 115% in the day of trading.
In addition, Quantum-Si’s end-to-end solution is on track to launch commercially in 2022 for research use. CAPA are confident the company can break into the $21 billion industry of pharmaceutical research.
“Quantum-Si’s business strategy aligns well with our investment philosophy. We have confidence that this highly passionate and experienced management team is well-positioned to deliver on its bold vision of revolutionizing the proteomics market…We look forward to supporting Quantum-Si and building a sustainable business that will be a disruptive force in the proteomics industry in the years to come.”said Kevin Rakin, Chief Executive Officer of HighCape Capital.
What to expect from Quantum-Si in 2021
Firstly, its important for investors to understand the current positioning of Quantum-Si alongside their financial performance. The company is currently pre-revenue and won’t expect to turn over any revenue until 2022. The revenue forecasts for 2022 are estimated at $17 million and is expected to increase to $49 million in 2023 and as high as $104 million in 2024. In addition, the company expects it will reach an operating profit by 2026. The revenue outlook is definitely a driving force in investor sentiment seen yesterday on CAPA stock. However, with high expectations regarding positive revenue growth Quantum-Si will need to deliver on their plan to have 5000 units installed by 2025.
We remind our viewers that this article is not financial advice but rather investment commentary from extensive research.
In conclusion, the CAPA – Quantum-Si merger has already made serious waves on Wallstreet. The merger will provide a QSI an influx of $500+ million to grow the business past its pre-revenue phase. Furthermore, Quantum-Si and its financial outlook for 2022-2026 look to provide a strong incentive for investors. However, the company won’t begin its rollout until 2022 which may cause the stock to experience some volatility in its pre-revenue phase (post merger). Therefore, we may see some volatility as the company becomes public and PIPE investors cash in.
The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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