Falcon’s Beyond (NASDAQ: FBYD) stock was at one point up some 350%. FBYD stock then fell back to close, aftermarket, at perhaps 65% up on the day. That’s some volatility there but then this can and does happen in the first days of the IPO of a despac operation.
One of the distinguishing markets for Falcon’s Beyond is that there actually is a real and viable business there: “Falcon's Beyond Global Inc. operates as an entertainment powerhouse and innovator in storytelling. The company connects the world by bringing stories to life through theme parks, resorts, animation, consumer products, gaming, movies, and others. It propels intellectual property (IP) activations across physical and digital experiences.” That idea of having a real and viable business is not something that is included in all Spac deals - as we know. How to value that business, well, that’s what is producing this volatility.
It’s clear that there are development possibilities: “Falcon’s Beyond, a US-based entertainment company, is further expanding its reach into China. The Orlando-based firm is teaming up with a unit of K11 Group, a business founded by Adrian Cheng, to open new entertainment franchises and attractions across China, the companies said in a statement Thursday. Under this joint venture, Falcon’s Beyond and K11 will develop Vquarium, where visitors will get to experience the simulation of an undersea voyage. The first Vquarium attraction is expected to open in 2025 at K11 Group’s 11 Skies in Hong Kong, slated to be one of the largest hubs for retail, dining and entertainment in the city.”
No, we’re not saying this will be successful but there’s clearly a lot more than merely the hope value of so many Spac deals.
Falcon’s Beyond stock price from Google Finance
We’re also not willing to try and predict where this stock price goes next. For the likely trigger for the next price move will be the final details on how many remained in the deal - how many redemptions were there among the original Spac stockholders? That then determines how much capital was raised.
Details of the deal are here.
To be honest, given the strength of the underlying Falcon’s Beyond business we’re slightly surprised that they used a Spac deal to come to market. Appears to us that they would have quite happily sailed through the normal IPO princess at possibly lower cost.
