LWAC Stock: Over 230% Increase Explanation

By Amit Chowdhry ● Aug 25, 2021
  • The stock price of Locust Walk Acquisition Corp (NASDAQ: LWAC) increased by over 230% during intraday trading. This is why it happened.

The stock price of special purpose acquisition company (SPAC) Locust Walk Acquisition Corp (NASDAQ: LWAC) increased by over 230% during intraday trading (previous close of $8.76 and day high of $29.20 today). Investors are responding positively to Locust Walk Acquisition announcing today that the company’s stockholders have approved all proposals related to the previously announced business combination with eFFECTOR Therapeutics at a special meeting of stockholders held on August 24, 2021. 

About 93.2% of the votes cast at the meeting on the business combination proposal, representing approximately 71.7% of LWAC’s outstanding shares, voted to approve the business combination. And the LWAC stockholders also voted overwhelmingly to approve the other proposals at the special meeting.

The business combination is expected to close on or about Wednesday, August 25, 2021. And upon closing, the combined company expects that its common stock and public warrants will commence trading on Nasdaq under the new trading symbols “EFTR” and “EFTRW,” respectively, starting on or about Thursday, August 26, 2021.

LWAC had received elections to redeem approximately 17 million of its outstanding shares, which will leave approximately $5.2 million in its trust account. And combined with the $60.7 million in expected gross proceeds from a concurrent private placement, there will be approximately $65.9 million of total cash proceeds from the transaction. As a result, eFFECTOR waived the requirement that the total cash proceeds equal or exceed $100 million. There will be about $53.5 million of net cash available to the combined company from the transaction, after deducting transaction fees and expenses.

eFFECTOR is expecting that the net cash following the transaction will allow it to readout topline data from the ongoing Phase 2b KICKSTART trial evaluating tomivosertib in combination with pembrolizumab in patients with metastatic non-small cell lung cancer (NSCLC) as well as readout initial overall response rate (ORR) data from the ongoing Phase 2a dose expansion cohorts evaluating zotatifin in patients with certain biomarker-positive solid tumors, including ER+ breast cancer and KRAS-mutant NSCLC.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.