DNAA stock rises 200% as Akili merger closes SPAC
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Shares in Share capital Suvretta Holdings (NASDAQ:NADA) rose sharply after news broke that it had completed its merger with Akili Interactive, which hopes to treat brain diseases using video games.
After the market opens on August 22, the company will trade as AKLI.
Shares jumped 48% on August 19, when the completion of the merger was announced. They were up nearly 200% in weekend trading. They were supposed to open at around $42 each.
What is Akili?
Akili focuses on using video games to treat ADHD. He signed a deal in May to integrate his game EndeavorRX into Roblox (NASDAQ:RBLX).
The game is designed to increase sustained attention in children ages 8-12. It’s also part of the target market for Roblox, which has built an interactive “metaverse” with its online games, many of which are made by kids.
Some journalists have been skeptical of Roblox, and its latest quarterly earnings statement seemed to warrant the skepticism. But whether Endeavor can gain traction with parents wary of ADHD drugs like Adderall who are already using Roblox, that could be a winner.
In addition to his work on ADHD, Akili is also conducting research on the use of video games against COVID Brain Fog, a cognitive impairment associated with “long COVID”.
The action in DNAA also represents a win for Chamath Palihapitiya, who sponsored the deal. Palihapitiya was an early advocate of Special Purpose Acquisition Companies (SPACs) and became the “King of SPACs” in the 2021 bull market. His reputation suffered in the 2022 bear market in tech stocks, especially SPACs designed to take companies public without the costs of investment banking. A SPAC goes public as a shell, then goes public as an active company through a merger.
DNAA Action: What Happens Now?
The success of DNAA stocks, or soon to be AKLI stocks, may be a triumph of hope over experience, especially as it comes as the underlying market braces for a tough open.
Still, any success for Akili would be a boon for the parents, and if Akili can prove her concept works, it could prove profitable.
As of the date of publication, Dana Blankenhorn did not hold any positions at the companies mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.