Lately, I’ve taken an interest in SPACs, or Special Purpose Acquisition Companies. Also known as blank check companies, SPACs pool money from a wide range of investors and use that money to acquire companies and assets in what amounts to take-public transactions. 

In my research of current SPAC opportunities, I came across Breeze Holdings Acquisition Corp. (NASDAQ: BREZ). The company has an impressive C-suite and plenty of access to capital to play ball, but let’s face it, the SPAC is all about the acquisition target – which is what makes this company so interesting to watch. 

BREZ Plans to Acquire TV Ammo, Inc. 

In a press release issued in November 2022, Breeze Holdings Acquisition Corp. announced plans to acquire TV Ammo, Inc., also known as True Velocity or True Velocity Ammo. So, what’s the TV Ammo story?

The company launched its business with the goal of improving upon the tools available to the United States military through the use of cutting-edge technologies. The company did so by producing a lightweight composite-cased ammunition solution. 

What’s the big deal?

Lower Cost of War in Terms of Casualties & Dollars

When our soldiers walk, fly, or drive into battle, they carry a significant amount of weight with them. Much of that weight is in the form of brass-cased ammunition. Increased weight means slower movement for those on foot and an increased need for fuel for ground and air assets. Ultimately, a heavier load means fewer soldiers make it home to their families while more money is spent on fuel for battle. 

That’s where composite-cased ammunition comes in. True Velocity ammunition is between 30% and 32% lighter than its brass-cased counterparts, depending on the type of ammunition you compare. That means that for every 100 pounds of ammunition a soldier has to carry around, TV Ammo takes between 30 and 32 pounds off his shoulders. 

Not to mention, TV Ammo’s rounds are proven to be more accurate than traditional brass-cased ammunition, further increasing our soldiers’ ability to make it back home. 

Relieving Brass Supplier Dependency

There’s no question that the world is changing before us. Superpowers around the world continue to vie for power and the threat of war is ever-present. That’s a problem if we can’t get our hands on brass. 

For the past 175 years, every shell casing used by the United States military has been a brass casing. So, it’s important to consider the suppliers of this key metal. 

Brass is a derivative of copper. If you look into the world’s leading copper producers, you’ll find that many of them are direct adversaries of the United States. Many of those that aren’t direct adversaries of the United States are controlled by direct adversaries of the United States. 

This means that in a worst-case scenario, we could face real difficulties getting our hands on the brass needed to sustain a war if one were to break out. 

True Velocity solves this problem. 

The company’s composite-cased ammunition is manufactured in Texas and doesn’t require any basic materials from anywhere other than the United States. 

This Is Just the First Step

At the moment, True Velocity is focused on ammunition, but you have to imagine that’s not going to be where they start. The company was able to make significant strides in a technology that hasn’t been updated in over 175 years, ammunition. In doing so, it has the potential to reduce casualties on the battlefield. 

If the company was able to reduce ammunition weight by 30% or more, one can only imagine what technological innovations will come out of the team next – with each one making life easier for our soldiers. 

The Deal Happens Soon

By August of this year, Breeze Acquisition Holdings Corp. will close the deal with TV Ammo, bringing TV Ammo to the public market at around a $1.2 billion valuation. As a result, there’s an opportunity right now to get in on the ground floor in a SPAC that has the potential to make big things happen for your portfolio and our military. 

Article Resources:

https://www.sec.gov/Archives/edgar/data/1817640/000121390022068368/ea167835-425_breezehold.htm

https://www.globenewswire.com/en/news-release/2022/11/01/2545238/0/en/Breeze-Holdings-Acquisition-Corp-Announces-Definitive-Agreement-to-Merge-with-TV-Ammo-Inc.html

https://en.wikipedia.org/wiki/List_of_countries_by_copper_production

Disclosure: CNA Finance is not an investment advisor or broker-dealer. This article is not a solicitation to buy or sell any security and was designed for information purposes only. This article was written by Joshua Rodriguez and shares his true opinion, which may not be the opinion of the publication it appears on. This is a sponsored publication for which CNA Finance received compensation. Trading and investing in stocks involve risk. CNA Finance suggests you speak with your personal financial advisor or investment advisor before making any investment decisions. 

Yesterday was a rough day for Camber Energy (NYSEAMERICAN: CEI), with the stock falling 3.70% by the closing bell – but that’s good news. I know, you’re probably thinking, “Josh, you’re crazy, nothing about CEI stock falling is good news,” but I’m here to tell you otherwise. After all, yesterday’s declines only expand the potential opportunity. 

The Viking Energy Merger Is Coming

I’ve written two articles about the fact that the storm clouds hanging over the merger between Camber Energy and Viking Energy have dissipated. So, I’m not going to spend too much time here. The simple fact is that this merger is likely to take place – and soon. If you’d like more details as to why I believe the merger is a no-brainer, click here and/or here.   

Today, we’re going to focus on what this merger means for shareholders. 

So, What Does the Merger Mean for Camber Energy Shareholders?

The merger between Viking Energy and Camber Energy is great news all around – especially when you dig into the financials. Let’s start with one of the most important numbers, shareholders equity. 

To determine shareholders equity, you need to subtract a company’s liabilities from the value of its assets owned. The remainder is equity, much like your home’s equity is determined by subtracting the amount of money you owe on your mortgage from the total value of your home. 

When it comes to Camber Energy, shareholders equity was about -$17.12 million as of December 2022, which included an approximate $7.6 million derivative liability component associated with Camber’s remaining Series C Pref. Stock which is a fraction of the previously outstanding amount Viking Energy’s shareholders equity was positive as of December 2022, meaning on the closing of the merger Camber’s negative equity will be a thing of the past. Further, as the remaining Series C Pref. Stock is extinguished the derivative liability component will decrease, thus increasing Camber’s shareholders equity.

The difference in revenue is also monumental. 

In 2022, Viking Energy produced about $24 million in revenue while Camber Energy produced about $597,260. During the year, Camber lost about $11.16 per share while Viking’s loss was just $0.13 for the year. So, losses are likely to shrink drastically, and with the combined assets and capabilities, the two companies may be able to squeak out a profit in the near-to-mid term. 

The Bottom Line

The bottom line here is simple. All signs suggest the merger investors have been waiting for between Camber Energy and Viking Energy will be taking place within the coming months. When this happens, CEI, the surviving company, will have plenty of shareholders equity on its books, revenue worth writing home about, and a path to profitability with far fewer bumps in the road. That’s enough to excite just about any investor!

Article Resources

• https://ycharts.com/companies/CEI/shareholders_equity
• https://www.alphaquery.com/stock/VKTX/fundamentals/quarterly/shareholders-equity
• https://www.macrotrends.net/stocks/charts/VKIN/viking-energy/revenue
• https://www.marketwatch.com/investing/stock/cei/financials
• https://finance.yahoo.com/quote/CEI/financials?p=CEI
• https://www.macrotrends.net/stocks/charts/VKIN/viking-energy/eps-earnings-per-share-diluted

Disclosure: CNA Finance is not an investment advisor or broker-dealer. This article was written by Joshua Rodriguez and expresses his personal opinion of Camber Energy but should not be construed as a solicitation to buy, sell, or otherwise trade any specific security. This is a sponsored article and should not be considered investment advice. Investing comes with risk and CNA Finance strongly advises investors to seek advice from licensed professionals before making any investment decisions. 

In February of 2021, Camber Energy Inc (NYSEAMERICAN: CEI) and Viking Energy Group Inc (OTCMKTS: VKIN) announced a coming merger. The merger was great news. Camber already owned the majority of Viking Energy and considering the synergies and growth of Viking, the merger was sure to bring CEI to the next level. It was great for Viking too. Through the merger, the OTC stock would find its way to a major exchange – opening the door to fundraising opportunities nonexistent on the OTC. Things were looking up. 

That is, until the United States Securities and Exchange Commission (SEC) had questions about Series C Preferred Shares. In a nutshell, these shares were somewhat toxic. They gave the holders the ability to dilute the stock heavily – something that’s never good news for shareholders. 

So, if Series C Preferred Shares set the stage for heavy dilution, why am I even talking about CEI? Well, the times are changing and the opportunity is quickly becoming one that I believe is hard to ignore. 

Toxicity Is Largely Alleviated & the Merger Is Likely Ahead

If there’s one thing I want to get across in this article, it’s simple:

The dark cloud that’s been hanging over the Camber Energy/Viking Energy merger for about a year and a half has dissipated, setting the stage for bright sunny skies ahead.

As mentioned above, the merger between Camber Energy and Viking Energy had been delayed as the result of shares that seemingly amounted to convertible debt with no floor. That’s painful, but that seems to be over. 

Well over 90% of the shares that halted the merger and threatened dilution have been taken off the books since the announcement of the acquisition. As a result, significant dilution seems to be a thing of the past for Camber and I’d be surprised if the merger didn’t go through in the next few months. 

What Does All This Mean for the Stock?

This is where things get very interesting in my humble opinion. Camber hasn’t had the best of times in the market through the delay of the merger and the dilution that followed in an effort to get out from under the toxic shares, for lack of a better way of saying it. YTD, the stock is down over 35% and over the past year, it’s given up more than 90% of its value. 

However, this has the potential to be a good thing.

Essentially, CEI’s merger delay and subsequent shedding of relatively toxic shares resulted in the stock’s value divebombing – creating a significant undervaluation. Over the past year and a half, a dark cloud hung over the stock, keeping CEI down and striking fear in investors – investors who continuously fled the ticker. 

Now, we have a situation where the company is nearly ready to close a transformative acquisition, but it’s still trading as if it never worked to get rid of those toxic shares. That creates an opportunity. 

The way I see it, when the public realizes the work CEI has done and the fact that the Viking merger is likely to close ahead, the stock is likely to push toward a more reasonable valuation – meaning significant growth could be ahead. 

Why This Merger Is Important

The merger between Camber and Viking brings significant value to Camber shareholders. That’s because much of the company’s value is already derived from its majority ownership in Viking. Combining the two companies only makes sense. But what exactly is Viking and where does that value come from?

Viking Energy has four divisions:

1. Power Solutions & Clean Energy. Viking Energy’s majority-owned subsidiary, Simson-Maxwell, Ltd. is a leading manufacturer and supplier of power generation products, services, and custom energy solutions. The company has been operating for more than 80 years and currently services over 4,000 maintenance contracts. 
2. Waste Treatment System Using Ozone. Viking also owns a cleaner, more sustainable way to get rid of waste for clients like laboratories, hospitals, and the military. 
3. Open Conductor Detection Technology. Viking Protection Systems, LLC and Viking Sentinel Technology, LLC, two majority-owned subsidiaries of Viking Energy Group, own the intellectual property rights to fully developed, patent-pending, ready-for-market proprietary Electrical Transmission and Distribution Open Conductor Detection Systems. 
4. Resources. Finally, Viking, through majority-owned subsidiaries, owns interests in oil and gas resources in the U.S..

The Bottom Line

The bottom line here is simple. Camber Energy has been battered in the market over the past year and a half or so. However, the dark clouds are becoming a thing of the past and it seems as though brighter skies are ahead as the heavy dilution weighing on the stock has largely been lifted the merger between Camber and Viking finally seems to be coming to a close. 

Article Resources

• https://www.vikingenergygroup.com/news-media/press-releases/detail/98/viking-energy-and-camber-energy-execute-definitive-merger
• https://www.vikingenergygroup.com/assets/waste-treatment-system-using-ozone
• https://www.vikingenergygroup.com/assets/power-solutions
• https://www.vikingenergygroup.com/assets/open-conductor-detection-technologies
• https://www.vikingenergygroup.com/assets/resources 

Disclosure: CNA Finance is not an investment advisor or broker-dealer. This article was written by Joshua Rodriguez and expresses his personal opinion of Camber Energy but should not be construed as a solicitation to buy, sell, or otherwise trade any specific security. This is a sponsored article and should not be considered investment advice. Investing comes with risk and CNA Finance strongly advises investors to seek advice from licensed professionals before making any investment decisions. 

Short squeezes were made popular as meme stocks like AMC Entertainment Holdings (NYSE: AMC) and GameStop Corp. (NYSE: GME) made dramatic runs for the top in 2021. These are far from the first short squeezes in history and haven’t been the last either. 

Below, we’ll talk about what a short squeeze is, some of the biggest short squeezes that have taken place in history, and how to spot one of these events on the horizon. 

What Is a Short Squeeze?

A short squeeze is a market phenomenon that takes place when a heavily shorted stock moves up in value. Traders with short positions buy to cover, resulting in a tremendous run for the top. Here’s how it works:

• The Short Sellers: Short sellers are traders who believe the stock is going to fall in value. To take advantage of this prediction, they borrow shares and sell them into the market immediately. When the stock falls, they repurchase the shares to return them, making the spread (difference between the selling price and buying price) as profit. 
• The Stock: The target stock in a short squeeze is one that’s heavily shorted. That means more than 20% of the stock’s public float is sold short. 
• The Big Move: The company announces positive news or traders believe the stock has reached the bottom, leading to an increase in value. Short sellers start to lose money as the stock goes up. 
• The Short Seller Reaction: In an attempt to stop the bleeding, the short sellers purchases shares in the open market to close their positions. This leads to a high volume of buying – sending the stock screaming for the top. 

Short squeezes typically lead to gains of more than 20% but have been known to cause stocks to more than double.  

How Public Float Plays Into Short Squeezes

A stock’s public float is the number of shares that are in the hands of investors rather than officers, directors, and those with controlling interests. As mentioned above, stocks don’t have a heavy short interest until at least 20% of the public float is sold short. When good news happens, short sellers race to cover, causing a short squeeze. 

However, if you could find a stock that has a small public float and is primed for a short squeeze, you may be in for significant gains. 

That’s because the market is a system of supply and demand. As the law suggests, prices decline when supplies are higher than demand. On the other hand, when supplies are lower than demand, prices rise. Think of a stock’s public float as its supply count. 

During a short squeeze, demand for a stock climbs tremendously as short sellers race to cover their positions. If the target stock has a small float – less than 10 million shares available to the public – stringent supply could lead to the stock doubling in value or climbing even higher. 

Short Squeeze Examples

Two of the best-known examples of short squeezes are GameStop and AMC Entertainment. In early 2021, traders worked together in an attempt to push institutional short sellers out of multiple big names in the stock market. 

From January 8th, 2021 to January 29, 2021, GameStop shares climbed from under $5 per share to more than $81 per share. The movement was so dramatic that social media participants were creating memes about the event – leading to an entirely new category of stocks – meme stocks. 

AMC experienced a series of short squeezes from January 8th, 2021 to June 18, 2021. In that time period, the stock had climbed from $2.14 per share to a high of $59.26 per share. As mentioned above, these are some of the most popular examples of short squeezes, but they’re far from the only short squeezes in history. 

Short Squeezes Throughout History

• Piggly Wiggly: One of the first big short squeezes in history happened in 1923, when traders started to short Piggly Wiggly. The company’s founder, Clearance Saunders, used his own money to purchase shares. He also worked with bankers to raise $10 million and purchase all but 1,128 shares of the company. The stock climbed by around 50%. Short sellers used the remaining public float to cover their positions and the NYSE permanently stopped all trading of the stock. 
• Volkswagen: In October of 2008, Porsche announced that it owned a 74% stake in Volkswagen. At the time, short interest was relatively high on Volkswagen’s stock. On the day of the announcement, shares opened at €348 and closed at €517. The stock found its top at €999 per share the following day. 
• Reliance Industries: 

Pros & Cons of Trading Short Squeezes

There are several pros and cons associated with trading short squeezes. Some of the most pressing are outlined below. 

Pros

The biggest pros associated with trading short squeezes include:

• Massive Potential Earnings: Short squeezes are known for causing stocks to make a tremendous run for the top. All short squeezes result in short-term gains well over 10%, but many result in gains in the hundreds of percentage points – but keep in mind that these gains are typically short-lived. 
• Excitement: Let’s face it. Most aspects of investing are relatively boring. However, when you see a stock flying like it’s got a pair of twin rocket boosters behind it, it’s a pretty exciting occurrence. So, trading short squeezes can be an exciting event. 
• Easy to Spot: Finally, short squeezes are typically very easy to spot. Simply flind a few active stocks that are making tremendous runs, look for short interest, and strike on the stock that is indeed a short squeeze. 

Cons

Although there are plenty of reasons to start looking for short squeezes to trade, there are also some significant cons to consider before you start. Some of the most pressing include:

• Impossible to Time: Short squeezes cause stocks to rise to ridiculous levels. However, it’s almost impossible to time when these stocks are likely to fall back down. As a result, many less-than-experienced investors take significant hits as the short squeeze ends. 
• Risk: Because it’s impossible to time the reversal here, short squeezes are some of the riskiest events to trade. So, if you’re risk averse, this isn’t an option for you. 
• Short-Lived: Short squeezes are typically a short-term event. So, you’re not going to make any serious long-term gains trading these events. In fact, if you jump in on a short squeeze and hold the stock for the long term, chances are you’ll lose and it will take a significant amount of time to recover. 

How to Spot a Short Squeeze

Spotting a short squeeze is relatively simple. Here’s how it’s done:

1. Find Active Stocks: Use your favorite stock screener to find the most active stocks on the market. You can use Stock Twits or a number of other resources for this. While you look for stocks, specifically look for those that are experiencing more than 10% gains.  
2. Look Into Short Interest: In order for a short squeeze to occur, there must be heavy short interest on the stock. So, look into short interest and ensure that it’s over 20%. If it is, there’s a good chance that the significant upward movement is likely the result of a short squeeze. 
3. Trade the Squeeze: You’ve found a short squeeze. Now, it’s time to use your chart and the technical data within it to trade the squeeze. 

How to Predict a Short Squeeze

Predicting a short squeeze is slightly more difficult than finding one that’s already active, but it’s not impossible. Here are the steps:

1. Find Heavily Shorted Stocks: Use a stock screener to find stocks with short interest that’s over 20%. After all, you need heavy short interest in order for a short squeeze to take place. 
2. Look for Coming News: In most cases, a positive catalyst (positive news) starts the upward movement in short squeeze stocks. So, consider what news may be on the horizon. For example, did you find a biotechnology company with heavy short interest? Do they have a PDUFA date on the horizon?
3. Assess the Possibilities: Now, it’s time to consider what the probability of positive news might be. For example, if the biotech company with the PDUFA date on the horizon recently had a meeting with the FDA that went well, there’s a highly likelihood their drug will be approved. That’s good news for a potential short squeeze. 
4. Wait: Never start trading a short squeeze before it happens. Instead, wait to confirm your findings. Once the squeeze starts, you should have plenty of time to capitalize on the trade. 

Final Thoughts

Short squeezes are an interesting phenomenon in the stock market. Not only are they exciting to trade, they have the potential to yield significant returns. On the other hand, they typically come with high risk. So, only trade these events if you have a detailed understanding of technical analysis and how to trade fast-paced moves in the stock market. 

Article Resources

• https://www.schwab.com/learn/story/ins-and-outs-short-selling
• https://www.investopedia.com/terms/b/buytocover.asp 
• https://content.next.westlaw.com/practical-law/document/Ibb0a3791ef0511e28578f7ccc38dcbee/Public-Float 
• https://www.investopedia.com/ask/answers/05/shortexceed50.asp
• https://www.businessinsider.com/personal-finance/stock-float 
• https://www.google.com/search?q=gme+stock&rlz=1CAVNCX_enUS955&oq=gme&aqs=chrome.0.69i59j69i57j69i59l3j69i60l3.337j0j7&sourceid=chrome&ie=UTF-8
• https://www.google.com/search?q=amc+stock&rlz=1CAVNCX_enUS955&oq=amc&aqs=chrome.0.69i59j46i199i433i465i512j46i175i199i512j0i20i131i263i433i512j0i433i512j69i60j69i61j69i60.630j1j9&sourceid=chrome&ie=UTF-8
• https://www.ig.com/en/trading-strategies/what-were-the-biggest-short-squeezes-in-history–210507