Apex Technology Acquisition Corporation

Apex Technology Acquisition Corporation (NASDAQ: APXT) is a special purpose acquisition corporation that raised USD 350.0 million from its IPO (“Initial Public Offer”).

Investment Highlights – Apex Technology Acquisition Corporation – Speculative Buy at USD 11.14

• The recent correction in the stock price has offered an attractive entry point for investors.
• The Company is riding high regarding the proposed merger deal with AvePoint. Moreover, the Board of Directors of AvePoint had authorized the APXT share purchase program worth USD 20.0 million.
• AvePoint remained confident of accelerating growth during 2021, boosted by the increased demand for the adoption of Microsoft 365 and Microsoft Teams.
• From a technical standpoint, 21 days exponential moving average (USD 10.56) seems favourable and support the upside potential in the stock price.

Key Risks

• The Company is a black check Company with no revenue.
• APXT may not be able to select an appropriate target business and unable to complete the proposed merger within the prescribed timeframe.
• The Company may not be able to obtain the additional funding required to complete the initial merger deal.
• AvePoint had been consistently reporting an operating loss, and it had reported the same during Q1 FY21 too.

Recent News

On 20 May 2021, APXT had announced the Q1 FY21 results for AvePoint. Moreover, the total revenue had witnessed an attractive year-on-year growth of around 19% to USD 38.8 million during Q1 FY21. The SaaS-based revenue jumped by almost 78% to USD 18.3 million during the period.

Financial Highlights (for 12 months ended 31 December 2020, as of 09 March 2021)

 (Source: Company result)

• The net loss had widened to negative USD 4.25 million during FY20.
• APXT had a general & administrative expense of USD 5.31 million for FY20.
• The Company had cash & marketable securities held in a Trust Account of USD 351.86 million as of 31 December 2020.

Share Price Chart

(Analysis done by Kalkine Group)

Conclusion

The Company has an ongoing proposed merger deal with AvePoint (largest data management solutions provider for Microsoft 365). Moreover, APXT does not have proper financial history and largely depends on the proposed merger deal. Furthermore, the Company has scheduled a general meeting on 30 June 2021 to urge stockholders to vote for the proposed business combination with AvePoint. The stock made a 52-week low and high of USD 9.76 and USD 17.90, respectively.

The next important support level on the technical chart is at USD 9.76.

Based on the bright prospect for AvePoint and various points mentioned above, we have given a "Speculative Buy" stance on Apex Technology Acquisition Corporation at the closing market price of USD 11.14 (as of 08 June 2021), while we will update once the proposed merger deal gets completed.

Vector Acquisition Corporation

Vector Acquisition Corporation (NASDAQ: VACQ) is a Special Purpose Acquisition Company (“SPAC”), focusing on the acquisition of various assets and businesses through a merger or other business combinations.

Investment Highlights – Vector Acquisition Corporation – Speculative Buy at USD 10.47

• Institutional investors have a fair amount of stake in the Company. Moreover, it has the backing of a private equity firm Vector Capital.
• VACQ would aim to complete the proposed merger deal with a space Company named Rocket Lab by Q2 FY21.
• The stock is trading just 7.72% above its 52-week low, which can be an attractive entry point for investors.
• From a technical standpoint, 21-day EMA (USD 10.13) is supporting the upside potential in the stock price.

Key Risks

• The Company does not have any commercial operations, and the performance of VACQ depends upon the operational progress of the merged entity.
• The financial performance post-merger deal may be adversely impacted by the lack of an established record of revenue, cash flows and experienced management.
• The proposed merger deal with Rocket Lab might not fare as per the expectations.

Recent Developments

On 04 June 2021, Rocket Lab had announced the appointment of Merline Saintil and Jon A. Olson to the Board of Directors.

Share Price Chart

(Analysis done by Kalkine Group)

Conclusion

On 01 March 2021, the Company had unveiled its plans for a merger with Rocket Lab. Furthermore, Rocket Lab is focused on launching small satellites into space. It has launched 97 satellites for government and private companies across 16 missions. The transaction would be expected to be completed by Q2 FY21. Upon completing the merger, the new Company will be publicly listed under the ticker “RKLB”. The space systems and space applications market is anticipated to reach USD 1.4 trillion by 2030. The stock made a 52-week low and high of USD 9.72 and USD 15.15, respectively.

The next important support level on the technical chart is at USD 9.72.

Based on the positive sentiments for the space industry, lucrative merger deal and the various factors discussed above, we have given a "Speculative Buy" stance on Vector Acquisition Corporation at the closing market price of USD 10.47 (as of 08 June 2021), while we will update when the proposed deal with Rocket Lab reaches completion.

Document Security Systems, Inc.

Document Security Systems, Inc. (AMEX: DSS) is the leading developer of secured technologies focused on blockchain security, direct marketing, healthcare, etc.

On 12 August 2021, DSS expects to announce H1 FY21 results.

Investment Highlights – Document Security Systems, Inc. – Speculative Buy at USD 2.90

• With the proposed acquisition of a 24.9% stake in Sentinel Brokers Company, DSS would consolidate the footprints of DSS Securities.
• The proposed sale of DSS Digital Division to Proof Authentication Corporation would enable the Company to focus on new, higher-return opportunities to grow shareholder value.
• On the liquidity front, the Q1 FY21 current ratio of 13.80x remained significantly ahead of the industry median of 1.38x.
• From a technical standpoint, 21 days exponential moving average of USD 2.86 is supporting the upside potential in the stock price.

Key Risks

• The operations in Asia expose DSS to the risks of tariffs and trade restrictions.
• There is high uncertainty around research and development efforts, with no assurance of the commercial success of the products.
• DSS may face intellectual property infringement resulting in the loss of significant rights.

Q1 FY21 Financial Highlights (for three months ended 31 March 2021, as of 14 May 2021)

(Source: Company result)

• The top-line business had demonstrated an increase from USD 4.22 million during Q1 FY20 to USD 4.94 million for Q1 FY21.
• The net loss had widened to negative USD 4.01 million during Q1 FY21.
• DSS had cash and cash equivalents of USD 52.06 million as of 31 March 2021.

One Year Share Price Chart

(Analysis done by Kalkine Group)

Conclusion

The wholly owned subsidiary of DSS, Premier Packaging Corporation, is going to shift its operations into a new 105,000 square-foot facility to cater for the growing customer demand. Moreover, DSS had witnessed decent revenue growth and a positive net income from continuing operations during FY20. Furthermore, the Company had managed to carry the positive momentum into Q1 FY21 and reported a modest revenue growth during Q1 FY21 on a year-on-year basis. In a nutshell, DSS would aim to double the top-line revenue and bottom-line profitability during FY21. The stock made a 52-week low and high of USD 2.45 and USD 10.55, respectively.

The next important support level on the technical chart is at USD 2.45.

Based on the proposed acquisition and disposal activities, decent revenue growth during Q1 FY21, and various factors discussed above, we have given a "Speculative Buy" stance on Document Security Systems at the closing market price of USD 2.90 (as of 08 June 2021), while we will revisit the stock once the Company comes up with further corporate announcements.

* The reference data in this report has been partly sourced from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached or if the price closes below the support level (indicative stop-loss price).