The Nasdaq Composite (^IXIC 0.45%) has been a stalwart performer over the past year, rising even when other major market benchmarks failed to gain ground. However, on Tuesday, the Nasdaq wasn't able to hold onto its early gains, finally succumbing to selling pressure by mid-afternoon. As of 1:30 p.m. EDT, the Nasdaq was down just a tiny fraction of a percent after being up more than 0.5% earlier in the day.
The connected-television space has been a strong performer lately, but even big gains from industry leader Roku (ROKU 2.66%) weren't enough to keep the Nasdaq out of negative territory. Meanwhile, despite a slump among special purpose acquisition companies (SPACs) in recent weeks, Property Solutions Acquisition (PSAC) came into the spotlight as it rebounded from its recent swoon after filing key documents with the U.S. Securities and Exchange Commission about its pending merger in the electric-vehicle (EV) space.
Roku lights up the screen
Roku managed to gain more than 7% on Tuesday afternoon. The streaming-TV provider got a boost from Wall Street analysts.
Evercore ISI was the latest to weigh in on Roku, starting coverage on the company with an outperform rating. Evercore also set a price target of $400 per share on the stock, which would be a roughly 13% gain from current levels.
The analysts believe that the trend toward cord-cutting on cable television is likely to continue and accelerate over time, and they see Roku as the biggest beneficiary of that trend. As more viewers move from cable to over-the-top and connected TV, advertisers will follow suit. Roku stands to collect a big chunk of advertising spending once that happens and it's well ahead of its peers in developing a business model to take advantage of the opportunity.
Roku has already taken the lead in becoming the largest provider of ad-supported video-on-demand services. Despite huge gains for the stock, the business has plenty of growth ahead of it.
Faraday has a future in this SPAC
Meanwhile, Property Solutions Acquisition rose more than 10%. The SPAC has been in the process of preparing to merge with an electric-vehicle company. After going on a roller-coaster ride, investors seem to be regaining confidence in its prospects.
Property Solutions announced its plan to merge with EV-specialist Faraday Future in late January. That sent the SPAC's price above $20 per share, more than double where it had traded at the beginning of 2021. Yet those gains quickly flamed out as investor appetites for SPACs, in general, waned. The stock dropped below $12 per share by early March, even though the deal was still on.
Proponents of the deal argue that Faraday's luxury and performance focus will be able to compete against Tesla (TSLA 0.49%) and other established players in the EV space. It also boasts unparalleled connectivity in what Faraday calls a "third internet living space" for back-seat passengers.
Today's move came after Property Solutions filed its preliminary proxy statement late Monday for the special meeting for shareholders to approve the deal. Investors are happy to see the process moving forward, and many are optimistic that Faraday will have a promising future ahead of it.