Chip designer GCT Semiconductor’s (NYSE:GCTS) stock jumped 568% on its first day of trading as the market’s appetite for tech ideas remained unabated.
GCT’s merger into special purpose acquisition company (SPAC) Concord Acquisition III, which traded as “CNDB,” gave it an initial value of $461 million. It opened for trade today at about $1.8 billion.
GCTS stock fell 25% overnight on low volume.
Who Is GCT?
GCT has been around since 1998 and designs communication chips and modules. It works under 4G LTE and 5G standards. The company had sales of just $14 million in 2023 and lost money. After the transaction, GCT received $50 million in gross proceeds to fund its growth.
The SPAC sponsor is Concord Acquisition III. It is an affiliate of Atlas Merchant Capital. Atlas’ CEO, Bob Diamond, formerly ran Barclays (NYSE:BCS) and is best known for touting regional banks. He tried unsuccessfully to buy Credit Suisse’s investment bank last year.
The ticker symbol for GCT Semiconductor is similar to that of GigaCloud Technology (NASDAQ:GCT), an online market for bulk goods. Its stock skyrocketed recently, and the company beat earnings estimates for its fourth quarter.
GCT tried but failed to go public last year before choosing the SPAC route. The sponsor, Concord Acquisition III, got into trouble in January because it didn’t have enough shareholders to maintain its listing. That seems to have been cleared up now.
GCTS Stock: What Happens Next?
Speculators at Stocktwits suggested investors looking to see where GCTS may be going should look at the GCTS Warrants (NYSE:GCTS-WT). They still trade at about 50 cents each after doubling in value on the first day of trading.
If the warrants start flying, the rally in the stock may have legs.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
