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Okay, now for some positive news. On a red day like today, we all need it. Shares of Tim Hortons China (NASDAQ:THCH) have started trading, and are exploding to the upside. At the time of writing, THCH stock has appreciated more than 13%.
This move comes as the Chinese subsidiary of the Tim Horton's coffee chain completed its SPAC merger today. This merger, which was between THCH and Silver Crest Acquisition Corp., appears to have gone very smoothly.
Now, it's worth noting that Silver Crest had previously seen significant selling heading into this merger. Additionally, THCH stock is trading well below $10 per share. Accordingly, perhaps this is simply a relief rally from the merger's completion.
In any case, let's dive into whether Tim Hortons China may be a buy here.
Is THCH Stock Worth a Look?
Today's price action with THCH stock is welcome for investors who are looking for any semblance of optimism right now. Markets are trending in a very bearish direction, and any company that looks like it's got positive momentum will likely be a focal point for retail and institutional investors alike.
This merger allows investors looking for direct exposure to Tim Horton's in China to invest directly. Tim Horton's, a popular Canada-based chain, can be invested in separately through parent company Restaurant Brands (NYSE:QSR). That said, the company's expansion into China has provided yet another investment angle. Today, THCH stock is surging, while QSR stock is taking a hit.
Perhaps this can be tied to the positive view the market is taking of this reverse merger arrangement. Through this SPAC merger, Tim Horton's China will receive nearly $200 million in aggregate financing. For a company that's expanding aggressively in this market, that's a great thing.
For now, it appears THCH stock is one to at least keep on the watch list.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris MacDonald's love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.
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