The final chapter has been written for Velocity Acquisition Corp. The special purpose acquisition company (SPAC), which went public in February 2021, has been formally liquidated after failing to identify a suitable merger target within its mandated timeframe. This process, initiated in December 2022, has definitive consequences for holders of the company’s various securities.
Liquidation Process and Delisting
Velocity Acquisition Corp. commenced its formal wind-down on December 20, 2022, following an announcement that it would be unable to complete a business combination. Consequently, the entity was removed from the NASDAQ Composite Index in December of that year. Financial research platforms now officially list the company’s status as “liquidated,” marking the end of its objective to take a private company public.
Impact on Shareholders and Security Holders
The liquidation fundamentally alters the nature of the invested capital. For public shareholders, the standard procedure for a SPAC that does not complete a merger is the redemption of common stock at a predetermined price per share from the trust account. With all business operations ceased, there will be no future financial reports, market catalysts, or corporate developments to influence value.
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The outcome was markedly different for warrant holders. The company clarified that these derivative securities expired worthless upon liquidation. Unlike common shares, warrants carry no entitlement to a pro-rata distribution from the trust fund in a dissolution scenario.
All trading activity has now ceased, as the legal dissolution of the corporation is final. Investors holding common stock positions at the time of liquidation received their redemption payment, while warrants resulted in a total loss for their holders. This concludes the Velocity Acquisition Corp. story for public markets.
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