Shares of Forum Merger II (NASDAQ:FMCI), the special purpose acquisition company that plans to take Tattooed Chef public in a reverse merger IPO, took a tumble this morning. The stock fell as much as 13.5% before recovering to only about a 3.6% decline as of 12:53 p.m. EDT.
Both the morning decline and the afternoon recovery may be connected to an important shareholder vote slated to take place tomorrow.
On Thursday, Forum Merger shareholders will vote on whether the date of the upcoming merger with Tattooed Chef can be pushed back from the end of this quarter (Sept. 30) to early next quarter (Oct. 30).
"Stockholders are not being asked to vote on the proposed business combination at this time," Forum Merger reminds shareholders in a recent press release. "A separate vote on the proposed business combination will take place in the coming weeks."
Forum Merger adds, "The purpose of the Extension Amendment is to allow the Company more time to complete its previously announced business combination with Ittella International, a plant-based food company with a broad portfolio of innovative products available both in private label and the "Tattooed Chef" brand ("Tattooed Chef")."
The implication of this advice, of course, is that if shareholders fail to approve the delay in tomorrow's vote, it's possible that the merger won't be completed in the prescribed time frame. This could conceivably cause the merger to fall apart, or at least be delayed beyond October, such that investors who have bet on the merger driving up Forum's stock price will be disappointed.
Personally, I don't think that's going to happen. Investors have already reaped 140%-plus gains on Forum stock precisely because they want this merger to happen. The chances they'll let those gains slip away for want of a single procedural vote, I would say, are slim.