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Nextdoor: Promising SPAC, But Too Rich Here

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  • Nextdoor agrees to a SPAC deal with Khosla Ventures at a $4.3 billion valuation.
  • The neighborhood network company only forecasts 2022 revenues reaching $249 million for 40% growth.
  • At $11, the SPAC is insanely expensive at a '22 EV/S multiple of 16x.
  • Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our model portfolio. Learn More »

Another SPAC with a promising business combination is the deal for Khosla Ventures Acquisition Co. II (KVSB) to acquire Nextdoor. The deal price isn't exactly cheap, so the SPAC hasn't rallied much above $10 despite the promising business model of the social media platform. My investment thesis is tepid on the stock until the SPAC closes and a cheaper multiple emerges.

Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Update - Nov. 2

The business combination vote was today with expected limited redemptions. The stock should begin trading on the NYSE on Nov. 5 under the ticker symbol "KIND". 

-A Special Meeting of KVSB Stockholders is scheduled to be held on November 2, 2021 at 11:00 a.m. ET; the business combination is expected to close on November 5, 2021, subject to final vote.

-The transaction is expected to raise at least $363.3 million from KVSB trust proceeds (after giving effect to preliminary redemption elections, which may be withdrawn, representing approximately 13% of the trust account), and $270 million from a fully committed common stock private placement (PIPE), resulting in total gross proceeds of at least $633.3 million.

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