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Why Forum Merger II Stock Just Popped 6%

By Rich Smith – Jul 27, 2020 at 11:18AM

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Sales nearly doubled in Q1. Then they nearly doubled again in Q2.

What happened

Forum Merger II Corporation (FMCI) isn't exactly a household name. It's not a phrase that just tumbles off the tongue. It's not a name we've written about here at The Motley Fool -- and fortunately, it's not a name we'll have to write about much longer.

As we told you about a month ago, Forum Merger II Corporation is in the process of buying the Tattooed Chef brand of plant-based foods in a SPAC-based IPO. Once that happens, the SPAC will be (mercifully) renamed Tattooed Chef -- and we can forget all about Forum Merger II Corporation.

But should you forget about investing in Tattooed Chef, too?

Tattooed Chef Cauliflower Mac and Cheese Bowl

Image source: Tattooed Chef.

So what

Maybe not. This morning, shares of Forum Merger II Corporation popped more than 11% in early trading (and they're still up about 5.6% as of noon EDT) after Tattooed Chef reported "record preliminary revenue for the six months ended June 30, 2020."

Revenues rose 96% year over year in the first half of 2020, reported the company, and growth was pretty consistent -- 95% in the first quarter and 96% in the second, pandemic notwithstanding.

Now what

Admittedly, Tattooed Chef discussed revenue growth only and did not mention the actual purpose of most publicly traded companies: not just growing revenues but doing so profitably. Tattooed Chef's press release contained not a single word about profits.

The company might not have the privilege of remaining coy on the subject of profits (or losses) much longer, however. Once it's a public company, it will have to release financial information on both its revenues and its profitability.

Forum Merger II Corporation says it plans to consummate the merger and take Tattooed Chef public later this quarter.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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