Inspirato Incorporated (NASDAQ:ISPO) is soaring more than 500% Thursday, just a few days after the company completed its SPAC merger with Thayer Ventures.
The move appears to be related to the high number of investors who opted to redeem shares during the merger process.
"Prior to and in connection with the Special Meeting, holders of 16,993,592 out of 17,250,000 shares of the Thayer’s Class A Common Stock exercised their right to redeem those shares for cash at a price of approximately $10.20 per share, for an aggregate of approximately $173.3 million," according to the company's Form 8K filing with the Securities and Exchange Commission.
EXCLUSIVE: Inspirato CEO Brent Handler On The Luxury Travel Company's Journey To The NASDAQ
SPACs often have redemption rights, which give investors the right to sell their shares back to the acquisition company for net asset value if they don't want to own the proposed company.
The redemption of SPAC shares reduces the amount of outstanding shares which also leads to a decline in the amount of shares available to short. Therefore, high redemption rates can often induce short squeezes.
Inspirato offers a subscription-based luxury travel service that gives subscribers access to upscale hotels and travel packages.
ISPO Price Action: Inspirato was up 560% at $81.71 Thursday afternoon.
