Reddit Breathes Life into Former SPAC Hopefuls The Metal Company (TMC) and Offerpad Solutions, Inc. (OPAD)

Reddit Breathes Life into Former SPAC Hopefuls The Metal Company (TMC) and Offerpad Solutions, Inc. (OPAD)

9:42am ET: A few weeks ago, we took a look at the Unusual Whales Social Media tracker that keeps us updated on tickers with high mentions on social media, namely Reddit. This morning, tickers popular on Reddit are leading the pack once again with massive morning moves. The Metal Company (TMC), Ironnet Inc. (IRNT), and Offerpad Solutions Inc. (OPAD) all found their way to the Reddit Most Mentions list over the last 48 hours. Indeed, the Unusual Whales Flow tool caught a frenzy of bullish options activity for all three of these tickers.

Controversial seafloor mining company, The Metal Company (TMC), went public last week. However, due to a general lack of rationale behind the $2billion valuation by its special purpose acquisition company (SPAC) partner, investors opted not to back the merger. Shortly after, the share price sunk around 11%. This was short-lived, however, as Reddit picked up the mantle on TMC.

After being posted to the famous r/WallStreetBets subreddit, TMC really started to garner traction. Social media buzzed with the ticker, expecting a short term squeeze. Options flow yesterday-- Wednesday, September 15, 2021-- showed similar sentiments.

Throughout the day yesterday, numerous ask-side call orders above $10k in premium were caught by the Unusual Whales Flow Tool. The flow had a heavy preference for the $10 call strike with September 17, 2021 and October 15, 2021 expirations--indicating expectations for a short term spike. Despite closing at around $10 yesterday, we saw TMC temporarily reach above $15 before pulling back a bit to the $13.50 price range, hanging around a 35% gain in pre-market trading.

Offerpad Solutions Inc. (OPAD) also worked its way to high mentions on Reddit. OPAD is a real estate company referred to as an iBuyer, which means they buy properties directly from the sellers, rennovates them, and immediately sells them. OPAD also recently went public via a SPAC earlier this month, called “Supernova”, which happens to be backed by Zillow co-founder, Spencer Rascoff. OPAD reached upward of $17 per share this morning, before bulling back to a strong +22% at $15.35.

Yesterday’s options flow for OPAD displayed the same heavy bullish expectations as TMC did. The $12.5 call strike for September and October was the favored target for options buyers, but some emphasis was placed on the future as well, with $10 and $17.5 calls for January 2022 working its way into the fray. Although, OPAD confidence seems to be a bit higher, given the fact that of all premium captured by the Flow tool, 61.45% is bullish. In fact, this bullishness is reflected across all premium levels.

Orders above $5k in premium were 59.5% bullish
Orders above $15k in premium were 67.3% bullish
Orders above $30k in premium were 100% bullish

As we can see in the images above, bullish orders made up the vast majority of all options premiums paid. In the case of orders above $30k in premium, an astounding 100% were bullish.

We will be watching the flow for both of these tickers, today, as well as social media. We're interested to see if this sentiment carries forward, or if we will see a short-lived redemption for these former SPAC hopefuls.