Something is in the Air

Last week’s announcement that Rice Acquisition Corporation (RICE/W) will be acquiring Aria Energy and Archaea Energy to create the industry-leading renewable natural gas (RNG) platform led to a strong move in both the stock and warrant. The combined company will be called Archaea Energy. 

It doesn’t get much greener than what Archaea does. All the landfills out there? They are emitting gas.

Archaea captures and converts those waste emissions into low-carbon RNG, electricity, and green hydrogen. Pretty cool. 

The combination of Archaea and Aria is expected to create the industry-leading platform in the U.S. to capture and convert those waste emissions from landfills and anaerobic digesters. Unlike most SPAC announcements last year, this deal creates a company that is already profitable. 

“Green” plays were a theme in 2020. The Rice announcement shows that theme is continuing into 2021. 

It is interesting that the strength of the activity post-announcement has not tapered off. The stock saw a pull back today, but is still trading well above last weeks $10. RICE closed out at just under $16. And the warrants, which closed out last Wednesday at $1.80, are now at $4.70.

It’s safe to say I won’t be looking at landfills the same way in the future. I won’t see a giant pile of trash any longer, but imagining all the RNG being produced.  

I’ll be keeping a close eye on RICE to see if it converts to the old SPAC pattern our group played successfully last year. A pop on the announcement. A pull back into a base over the next several weeks. And then a run higher into the faux IPO.