The Inspirato Inc (NASDAQ: ISPO) share price shot up nearly 650% yesterday, after going public via special purpose acquisition company (SPAC) combination with Thayer Ventures Acquisition Corp.
Inspirato runs a luxury travel service business via subscription. It offers vacations to over 240 global destinations through its network of luxury hotels and managed vacation homes.
The world’s first luxury travel subscription gives subscribers access to more than one million trips with first-class service. The monthly subscription fee is a cool $2,500 a month plus the same to enroll.
The Inspirato business combination was approved on 8 February and went public six days later. At IPO, the ISPO share price rose as much as 41% but surprised investors three days later when it soared to a high of $108.
The reason for the incredible price action appears to be mass share redemption linked to the structure of the SPAC. Some 16.9 million out of 17.2 million shares of Thayer Stock owners were redeemed for around $10.20 per share.
A SPAC often comes with many options for original investors to redeem their shares. In this instance, they appear to have redeemed for net asset value rather than opting to own ISPO stock. This reduced the number of outstanding shares available to short, thus inducing a short squeeze.
In yesterday’s session, trading in ISPO shares was halted a series of times. And today, ISPO Stock is down 20% in pre-market trading to $74.
Analyst Mike Grondahl of Northland Securities initiated his coverage of Inspirato stock with a $14 price target. That’s clearly been far-exceeded.