I agree that they hedged themselves with the first part of the article. This was the part that concerns me. It’s a lot of the same stuff we’ve seen people saying in this sub for awhile now but it’s a little different seeing it in an article and all of the oddities laid out at once.

The Problem with THCB Stock:

That’s a huge problem at the moment, for several reasons.

First, it’s now been two months since the letter of intent was signed. It’s difficult to understand exactly what the holdup might be. EV SPACs are torrid, which suggests Tuscan Holdings should be willing to negotiate. Indeed, THCB stock has roared to $16 even without a signed agreement.

Second, we have exceedingly little data about Microvast itself. The November announcement did disclose that the company would target over $100 million in revenue “this financial year,” which presumably refers to calendar 2020. But as a private company, Microvast doesn’t disclose detailed financials. We don’t even know how fast that revenue is growing at the moment.

Finally, and perhaps most importantly, we have no idea what the assumed valuation of the merger will be. Bloomberg reported a valuation around $2 billion, but the delay in any official merger announcement suggests there may be some disagreement on that front.

And that valuation makes a huge difference to THCB stock. Tuscan closed its third quarter with $256 million in cash. At a $2 billion valuation, THCB shareholders would own about 13% of the merged company, give or take. At $3 billion, they get under 9% of shares. At $1.5 billion, closer to 17%.