What happened

Chances are you never heard of a stock called Forum Merger II (NASDAQ:FMCI) before today. But chances also are that you've now heard of this special-purpose acquisition company, after the stock rocketed 18% on Thursday.

So what

According to a report by TheFly.com, Forum Merger II stock is surging because Tobin Smith, author of the investment guide ChangeWave Investing, said that he thinks it will be worth a lot more after it completes its planned acquisition.

Tattooed Chef cauliflower mac & cheese bowl

Image source: Tattooed Chef.

Forum Merger II is set to combine with a company called Ittella International, which owns the Tattooed Chef brand of plant-based foods, in a reverse merger that will function as Tattooed Chef's de facto IPO sometime in Q3 2020.  

In a press release a couple of weeks ago describing the planned merger between Forum and Ittella, the Tattooed Chef was described as an "innovative plant-based food company with an established brand as well as a private label presence." It's estimated to have $148 million in revenue this year, growing 50% to $222 million next year.

Now what

Upon consummating their merger next quarter, Forum and Ittella estimate that their new company, which will trade as Tattooed Chef, will be worth $482 million in enterprise value, or about 3.2 times trailing sales. When you consider that Beyond Meat (NASDAQ:BYND), a much better-known brand in the plant-based foods space, sells for 27.6 times trailing sales, there's certainly an argument to be made that Forum Merger II stock could be worth more than it currently sells for.

To that extent, Tobin Smith appears to be right on the money.