Tortoise Acquisition 2 (SNPR SPAC)

Written by Donnie Nguyen

September 29, 2020

If you have been keeping up with investment news, you may have heard that Hyliion – an electric truck and powertrain company – is in the process of merging with Tortoise Acquisition Corp – a SPAC. 

The latest news is that the same management team just IPO’d a second SPAC, Tortoise Acquisition Corp II (NYSE: SNPR.U).

I decided to make an investment in the units. In this article, I will tell you a bit about the SPAC, why I invested, and my predictions for this SPAC.


SPAC structure

It’s essential to first look at the SPAC structure, so here is my interpretation of the S1 filing

  • Its target business is obviously green energy.
  • The business combination deadline is 24 months.
  • Units are offered at $10 per unit for a total of $250 million.
  • There is a $250 million hold in the trust. 
  • The units are listed on the New York Stock Exchange as SNPR.U; the commons will be listed as SNPR and the warrants as SNPR WS
  • Each unit has one-fourth of one warrant. 
  • The common and the warrants won’t be available until 52 days after the IPO date (around November 1st 2020). At this time, the units, common, and warrants will all trade. 

This means that if you want to separate the units into the common and the warrants, you will need to get in touch with your broker to see how that process will work. Depending on which brokerage you use, this process might vary a bit. 

Your broker may also charge a fee – if they do, this could be a downside when you split the units (assuming you do want to split them).

  • The warrant ratio is 1:1, and the exercise price is $11.50, so one warrant will allow you to exercise one common stock for $11.50 once the warrants become exercisable. 
  • There are two warrant redemption clauses. One is $18 upon 30 days of written notice. The other is $10.
  • There is also the private placement of warrants at $1.50. Due to this, I personally see $1.50 as the intrinsic value of the warrants. 

Why have I invested? 

I didn’t have to think much about making this investment – and there are three main reasons why. 

The first one is that Tortoise One is doing extremely well. You’ve only got to look at the figures – common stock is up 400% in 3 months, and warrants are up 2000%. Clearly, this merger with Hyliion is going incredibly well. As the same management is in charge of Tortoise Acquisition Corp Two, I’m speculating that they will pick another winner. 


Sometimes it takes a while for SPACs to decide on a merger. However, I think that Tortoise Acquisition Corp 2 already has a target in mind. Before merging with Hyliion, the CEO and Chairman of Tortoise, Vince Cubbage, stated that they evaluated over 200 companies.

I presume that from these evaluations, they have a shortlist of 5-10 companies. Due to their success with Hyliion, I think a merger with Tortoise 2 would be very enticing to any prospective companies. I’m also speculating that the eventual merger target will be a strategic fit for Hyliion’s business model.

Many people think that these mergers take a while, sometimes a year or longer. But this isn’t necessarily true — fellow green energy company, Kensington Capital, IPO’d their SPAC in late June. Two months later, they announced a merger with QuantumScape, which is backed by none other than Bill Gates. Therefore, I predict that Tortoise Acquisition 2 should announce a merger in less than six months. 

My third reason is for the market mania in green energy. Just look at how well the other companies focusing on green energy are doing to see what I mean. 

  • Nikola – up 200% in 7 months.
  • Tortoise acquisition with Hyliion – up 400% in 3 months. 
  • DiamondPeak holdings with Lordstown motors – up 200% in 2 months.
  • Kensington Capital with Quantumscape – up 70% in 1 month.

As long as this mania doesn’t go anywhere, any SPAC involved in green energy could be a fantastic investment choice – at least in the short term.


Pros and Cons of Purchasing Before the Split

As you can see, I purchased before the separate trading of warrants and common stock. There are a few pros and cons to this, and I evaluated them carefully before deciding. 

In this type of trade, I would much rather purchase the warrants – even though they can be riskier. However, I made my decision for a few critical reasons. 

The first one is that once the units, commons, and the warrants trade separately, I believe that the warrants will spike in price. Because of the huge success of the Hyliion merger, investors are going to catch on to it. This means that once the warrants become available on their own, there could be a flood of money coming in, which will pump up their price. So, by purchasing before the split happens, I might be getting in cheaper. 

Furthermore, my risk of loss in purchasing the SPACs is limited since money is held in the trust. If the company does not choose a merger target, theoretically the most I can lose is around 15% of my capital.

There is one con that stands out: the short-term profit potential of the units is much smaller than the warrants. However, when weighing them both up, it was evident that purchasing before the split was the way to go.

My game plan

So, right now, I own 100 units. 

The warrants should become available 52 days after the IPO date, in early November. If they are reasonably priced (for me, this is under $2 each) and Hyliion is doing well, I will buy $300-$500 worth of warrants. 

At the same time, I will sell my common stock if I’m at a profit. If I’m not, I will just hold my stock until a merger announcement happens. Once it does happen, I will re-evaluate the situation depending on the merger and how Hyliion is doing. Check back for more information when this happens!


  • Pay attention to when your warrants expire
  • Make sure they don’t expire worthless if you can sell or redeem them
  • See my price prediction for where these warrants will trade

DISCLAIMER: I'm not a financial advisor. These are my opinions and provided "as-is". It is not an offer to buy or sell securities. Read the Terms and Conditions.

What do you think about Tortoise Acquisition 2 (SNPR)? Leave me a comment below. Thanks for stopping by.


I/we own shares of SNPR.U

Except for Wolves of Investing, I/we are not receiving any compensation from and do not have any business dealings with any companies whose stocks are discussed in this article.

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Donnie Nguyen

Donnie Nguyen

Donnie Nguyen is the founder and CEO of Wolves of Investing. He started investing in the stock market in the early 2000s. He follows the teachings of Peter Lynch, Warren Buffett, and other investing legends. When he's not investing or blogging, he loves spending time with his family traveling and experiencing the world.

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