GXGX Merger Date With Celularity Delayed, New Date Still Pending

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Jul. 15 2021, Published 2:20 p.m. ET

Blank-check firm GX Acquisition Corp. (NASDAQ:GXGX) is set to merge with biotech company Celularity, Inc. The original expectations for the transition have been postponed, and investors are still awaiting the official merger date.

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When can investors expect to see Celularity on the market after the updated SPAC merger date?

Following shareholder approval, GX targets biotech firm Celularity

In January, GX announced that it was targeting Celularity in a SPAC deal that would ultimately turn GXGX stock into CELU. Celularity is an allogeneic cellular therapy company. The company's research centers around a single source of cells that can treat many patients.

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The combined entity secured $80 million in PIPE (private investment in public equity) funding. With this funding plus GX Acquisition Corp. trust liquidity, the deal is reported to produce $372 million. Ultimately, this could produce a post-transaction equity value of about $1.7 billion.

Shareholders officially approved the deal in May. GX and Celularity were able to enter a merger agreement and reorganization plan.

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GX initially planned to complete the merger in Q2 2021

Celularity wrote a press release at the start of the year stating, "The business combination is expected to be completed during the second quarter of 2021." However, the second quarter came and went. What happened?

Following the shareholder vote, GX announced that it was extending the date it had to finalize the merger. The company pushed back the May 23 deadline to July 31.

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Following postponement, GXGX merger close nears

SPACs can and do fail. However, the GXGX merger with Celularity looks like it's going to happen. The date will just be later than expected. The company's definitive filing went through on June 25 after a preliminary filing and four revisions. The most recent merger meeting occurred on July 14, with the expected close date yet to be set.

GX and Celularity aren't alone. Other mergers remain in the meeting phase without a set debut date, including SPACs attached to Hillman Group, Faraday Future, Stryve Foods, and Microvast.

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Should you invest in GXGX stock before the CELU merger?

The interest in an early GX investment has waned since investors realized that the company was pushing the merger date back. The shares are down 21 percent in the three days following the market close on July 12.

GX started seeking a SPAC target upon its August 2019 listing, and units are in the red for every time horizon. It's a risky bet, and profit for the combined entity will likely be slow due to the clinical research and development nature of Celularity. This kind of work practically screams slow and steady, which could put early investors at a disadvantage as they await a potential growth spurt.

However, global cell therapy holds a lot of potential much like the CRISPR environment. To put a damper on some risk, wait until the CELU debut before making your decision.

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