Connect with us

SPACS

Goldman CEO Says SPAC Explosion ‘Unsustainable’

Avatar

Published

on

Goldman Sachs CEO David Solomon said he doesn’t think the current special purpose acquisition company (SPAC) boom is sustainable, the Financial Times (FT) reported.

Companies or investment groups create SPACs to raise money through the sale of stakes to either the public or entities such as private equity funds. A SPAC then uses the funds to purchase an existing company.

SPACs themselves have no business operations. They’re set up as shell companies solely for the purpose of taking companies public that don’t want to go through the usual initial public offering (IPO) process.

The tool was used last year to raise almost $79 billion from investors, FT reported.

But in a speech to analysts Tuesday (Jan. 19), Solomon said he doubted the SPACs would continue at their current rate of productivity, FT reported. He also said he wonders if the trend has “gone too far.”

He said he thinks the form could be a solid alternative to the usual processes, but that perhaps it isn’t ready yet, FT reported.

“The ecosystem is not without flaws,” he said, according to FT. “I think the incentive system is still evolving. One of the things we’re watching very, very closely is the incentives for the sponsors and also the incentives of somebody that’s selling.”

He also said there’s a difference between a company doing a SPAC merger because it wants to and a company participating because it lacks any other options, FT reported. He said these are “things that the market will have to wrestle with.”

SPACs had over 250 shell companies listing on U.S. stock exchanges last year, which raised a record $78.7 billion, FT reported. That’s half of the overall 2020 IPOs.

Some SPAC founders have come under scrutiny for their excessive compensation, as they’re usually awarded around a 20 percent stake in the company for a sum of $25,000, according to FT.

PYMNTS reported last year that a SPAC could be stopped is if no acquisition targets spark a deal. If that happens, the SPAC gives its capital back to the investors, and the investment vehicle ends up being nixed.

Source: PYMNTS – Goldman CEO Says SPAC Explosion ‘Unsustainable’

Source: https://spacfeed.com/goldman-ceo-says-spac-explosion-unsustainable?utm_source=rss&utm_medium=rss&utm_campaign=goldman-ceo-says-spac-explosion-unsustainable

SPACS

‘SPACs Attack’ Weekly Recap: Looking Back On 9 Deal Announcements, Rumors And Headline News

Avatar

Published

on

It was another busy week for the SPAC market with numerous deal announcements and rumored deals. The market brought down the valuation of many SPACs late in the week.

Here is a look back at the announced deals, rumors and some top headlines that were coverd on Benzinga’s “SPACs Attack” show.

SPAC Deals:

  • Bitfury is spinning off Cipher Mining in a SPAC deal with Good Works Acquisition Corp (NASDAQ:GWAC). The deal values the company at $2 billion. Cipher Mining is expected to have mining capacity of 745 MW by the end of 2025 and an industry-leading energy cost of 2.7 cents per kWh. The company is estimating revenue of $350 million in fiscal 2022 and $1 billion in fiscal 2025. Cipher Mining is expected to have a large presence the Bitcoin mining market.
  • Rocket Lab announced a SPAC merger with Vector Acquisition Corporation (NASDAQ:VACQ) valuing the company at $4.1 billion. The deal is expected to help fund Rocket Lab’s development of its reusable launch vehicle and several booked missions to the Moon, Mars and Venus. Rocket Lab is one of only two U.S. commercial companies delivering regular access to orbit. The company, which competes with SpaceX, has completed 18 launches to space and has deployed 97 satellites.
  • Space-based data and analytics company Spire Global is going public in a $1.6 billion deal with NavSight Holdings Inc (NYSE:NSH). The company has a constellation of over 100 satellites and plans on pioneering the space-as-a-service business model. The company is projecting compounded annual revenue growth of 100% from 2020 to 2025.
  • Hippo, an online insurance company targeting the homeowner market, is going public in a SPAC merger with Reinvent Technology Partners Z (NYSE:RTPZ). The deal values the company at more than $5 billion.
  • DeepGreen, a developer of underwater mining for resources, is going public with Sustainable Opportunities Acquisition Corporation (NYSE:SOAC). The deal values the company with a pro forma equity value of $2.9 billion. DeepGreen said it has the largest and highest grade estimated source of electric vehicle battery metals. The company’s project will mine the Pacific Ocean floor for nickel, cobalt, copper and manganese.
  • Anghami, the largest music streaming company in the Middle East and North Africa, is going public with the SPAC Vista Media Acquisition Co (NASDAQ:VMAC). Anghami has more than 70 million customers and partnerships with several large music labels.
  • Beacon Street Group, which provides financial research, software and tools for investors, is merging with Ascendant Digital Acquisition Corp (NYSE:ACND). The deal gives the company an enterprise value of $3 billion. Beacon Street Group had revenue of $377 million in fiscal 2020, a year-over-year increase of 39%.
  • QOMPLX is merging with Tailwind Acquisition Corp (NYSE:TWND) in a deal that will bring the cloud-native risk analytics company public. QOMPLX helps businesses in the cybersecurity and insurance domains. Part of the merger also includes the acquisitions of analytics solutions provider Sentar and insurance platform Tyche.
  • Residential real estate company Doma is going public with Capitol Investment Corp V (NYSE:CAP). Doma uses machine intelligence to help close real estate transactions. The company has been involved in over 800,000 real estate closings for lenders.

SPAC Rumors:

  • Shares of Horizon Acquisition Corp II (NYSE:HZON) were in the spotlight last week with a rumor of a SPAC merger with Sportradar, a company that provides data on sporting events. Sportradar has an exclusive deal with the NFL, which is also an investor in the company. Sportradar also has deals with MLB, NBA, NHL and the International Tennis Federation. Investors in Sportradar include the Canada Pension Plan Investment, Michael Jordan, Mark Cuban and Revolution Growth. The deal could value Sportradar at $10 billion or more.
  • Apollo Strategic Growth Capital (NYSE:APSG) has been rumored to be taking Solera public. The rumor from Bloomberg now sees the SPAC also bringing DealerSocet and Omnitracs public with Solera in a combined deal value of $15 billion.
  • Lilium, an electric vertical takeoff and landing vehicle company, is in talks to go public with Qell Acquisition Corp (NASDAQ:QELL), according to Bloomberg.

Headlines:

  • Sports betting company DraftKings Inc (NASDAQ:DKNGannounced a partnership with DISH Network (NASDAQ:DISH). The deal will bring DraftKings’ sportsbook and daily fantasy games directly to DISH Network customers nationwide.
  • Clover Health Investments Corp (NASDAQ:CLOVreported fourth quarter revenue of $166.2 million, a year-over-year increase of 44%. Full fiscal year 2020 revenue of $673 million was up 46% year-over-year. The company beat revenue and member projections for fiscal 2020. The company’s 2020 projections for revenue and members came in below original projections from the investor presentation.
  • Opendoor Technologies (NASDAQ:OPEN) reported full fiscal year 2020 revenue of $2.58 billion and 9,913 homes sold. Both figures came in ahead of company estimates.
  • Shares of Virgin Galactic Holdings (NYSE:SPCE) fell on Friday when it was revealed that Chairman Chamath Palihapitiya sold the rest of his personal shares in the company. Palihapitiya sold 6.2 million shares at an average price of $35 to fund other projects. The chairman still owns 15.8 million shares through his partnership in Social Capital Hedosophia.

Be sure to tune into SPACs Attack, Monday through Friday, 11 a.m. EST. Below are links to the past week’s shows:

Disclosure: Author is long shares of SOAC and SPCE.

Source: Benzinga – ‘SPACs Attack’ Weekly Recap: Looking Back On 9 Deal Announcements, Rumors And Headline News

Checkout PrimeXBT
Trade with the Official CFD Partners of AC Milan
Source: https://spacfeed.com/spacs-attack-weekly-recap-looking-back-on-9-deal-announcements-rumors-and-headline-news?utm_source=rss&utm_medium=rss&utm_campaign=spacs-attack-weekly-recap-looking-back-on-9-deal-announcements-rumors-and-headline-news

Continue Reading

SPACS

U.S. crowd-safety firm Evolv to go public in $1.7 bln SPAC deal

Avatar

Published

on

March 7 (Reuters) – U.S. crowd-safety company Evolv Technology said on Sunday it is combining with blank-check firm NewHold Investment Corp to go public in a deal that will value it at about $1.7 billion.

Evolv is backed by investors including Microsoft co-founder Bill Gates and venture capital firm General Catalyst.

The deal is expected to close in the second quarter, and the company expects to trade on the Nasdaq under the ticker “EVLV”, according to the Wall Street Journal, which first reported the news.

Special-purpose acquisition companies, or SPACs, are shell companies that raise funds to acquire a private company with the purpose of taking it public, allowing such targets to sidestep a traditional initial public offering to enter public markets.

An increasing number of companies are merging with a SPAC, as it involves less regulatory scrutiny and more certainty over the market valuation and funds raised.

Evolv uses AI technology and sensors to screen people in public spaces such as stadiums, hospitals, schools, and entertainment venues among others, eliminating gaps presented by metal detectors, according to its website.

The company lists customers including Six Flags Entertainment Corp, New York City’s Metropolitan Museum of Art, and the Lincoln Center. (Reporting by Bhargav Acharya in Bengaluru; Editing by Muralikumar Anantharaman

Source: Reuters – U.S. crowd-safety firm Evolv to go public in $1.7 bln SPAC deal

Checkout PrimeXBT
Trade with the Official CFD Partners of AC Milan
Source: https://spacfeed.com/u-s-crowd-safety-firm-evolv-to-go-public-in-1-7-bln-spac-deal?utm_source=rss&utm_medium=rss&utm_campaign=u-s-crowd-safety-firm-evolv-to-go-public-in-1-7-bln-spac-deal

Continue Reading

SPACS

Rumor: Shutterfly in Talks to Go Public Through SPAC Merger

Avatar

Published

on

Shutterfly Inc. is in talks to go public through a merger with a blank-check company, according to people familiar with the matter, less than two years after Apollo Global Management Inc. took the online-photo-book maker private.

The company is discussing a deal with a special-purpose acquisition company called Altimar Acquisition Corp. II that would value it at between $4 billion and $5 billion including debt, the people said. Details of the potential transaction couldn’t be learned.

Any deal could be weeks away, some of the people said, and there is no guarantee the parties will reach an agreement. If they do, it would add Shutterfly to the long list of companies taking part in a recent explosion of deals involving SPACs, which raise money in a public offering with plans to later find one or more companies to merge with.

The Altimar vehicle went public in February, raising $345 million to put toward a deal, which as is typical would likely include additional funds raised privately. A previous vehicle, Altimar Acquisition Corp., agreed last year to combine two investment firms and take them public in a $12.5 billion deal that at the time was one of the largest blank-check transactions.

Founded in 1999, Shutterfly’s namesake brand helps consumers print their photos onto personalized books and gift items. The company owns Lifetouch, which does school photography and operates portrait studios and also has a digital-printing arm for businesses. It first went public in 2006. Apollo bought the company in 2019 for around $2.6 billion including debt and then combined it with Snapfish LLC to create a bigger player in online-photo services.

Source: The Wall Street journalShutterfly in Talks to Go Public Through SPAC Merger

Checkout PrimeXBT
Trade with the Official CFD Partners of AC Milan
Source: https://spacfeed.com/rumor-shutterfly-in-talks-to-go-public-through-spac-merger?utm_source=rss&utm_medium=rss&utm_campaign=rumor-shutterfly-in-talks-to-go-public-through-spac-merger

Continue Reading

SPACS

German Flying-Taxi Startup Is In Talks to Merge With Qell SPAC

Avatar

Published

on

Lilium, a German startup that’s making an all-electric vertical takeoff and landing passenger jet, is in talks to go public through a merger with Qell Acquisition Corp., a special purpose acquisition company, according to people with knowledge of the matter.

Qell has begun discussions to raise new equity for a transaction to value the combined entity at more than $2 billion, said one of the people, who requested anonymity. As with any deal that hasn’t been finalized, it’s possible terms change or talks fall apart.

Representatives of Qell and Lilium declined to comment.

Munich-based Lilium, co-founded in 2015 by engineers Daniel Wiegand, Sebastian Born, Matthias Meiner and Patrick Nathen, became a so-called unicorn last year after raising $35 million from Baillie Gifford & Co.

Lilium said in January that it would work with Ferrovial SA to develop at least 10 “vertiports” to serve locations throughout Florida. It expects the jets to be available in cities around the world by 2025, its website shows.

Qell, led by former General Motors Co. executive Barry Engle, raised $350 million in a September initial public offering and said it’d seek out a target in the next-generation mobility, transportation and sustainable industrial technology sectors.

Source: Blooomberg – German Flying Taxi Startup Eyes SPAC Merger: Report

Checkout PrimeXBT
Trade with the Official CFD Partners of AC Milan
Source: https://spacfeed.com/german-flying-taxi-startup-is-in-talks-to-merge-with-qell-spac?utm_source=rss&utm_medium=rss&utm_campaign=german-flying-taxi-startup-is-in-talks-to-merge-with-qell-spac

Continue Reading
Blockchain5 days ago

‘Bitcoin Senator’ Lummis Optimistic About Crypto Tax Reform

Blockchain5 days ago

Dogecoin becomes the most popular cryptocurrency

Blockchain5 days ago

Billionaire Hedge Fund Manager and a Former CFTC Chairman Reportedly Invested in Crypto Firm

Blockchain5 days ago

Bitcoin Price Analysis: Back Above $50K, But Facing Huge Resistance Now

Blockchain5 days ago

Institutional Investors Continue to Buy Bitcoin as Price Tops $50K: Report

Blockchain5 days ago

NEXT Chain: New Generation Blockchain With Eyes on the DeFi Industry

Big Data3 days ago

Online learning platform Coursera files for U.S. IPO

Blockchain4 days ago

Elrond & Reef Finance Team Up for Greater Connectivity & Liquidity

Blockchain4 days ago

SushiSwap Goes Multi-Chain after Fantom Deployment

Blockchain4 days ago

Here’s why Bitcoin could be heading towards $45,000

Blockchain4 days ago

Non-Fungible Tokens – NFT 101 – Why People are Spending Millions of Dollars for Crypto Art and Digital Items

Blockchain5 days ago

UK Budget Avoids Tax Hikes for Bitcoin Gains

Blockchain4 days ago

eToro and DS TECHEETAH Change Face of Sponsorship With Profit-Only Deal

Blockchain4 days ago

Apple Pay Users Can Now Buy COTI Via Simplex

Blockchain4 days ago

TomoChain (TOMO) Increases after Retesting Previous All-Time High

Business Insider2 days ago

Wall Street people moves of the week: Here’s our rundown of promotions, exits, and hires at firms like Goldman Sachs, JPMorgan, and Third Point

Blockchain5 days ago

Ethereum’s price prospects: What you need to know

Blockchain5 days ago

Silicon Valley-based Taraxa Unveils Details of Upcoming Public Sale

Blockchain4 days ago

Tron Dapps Market Gets A Boost As Bridge Oracle All Set to Launch MainNet Soon

Blockchain5 days ago

Drug traffickers ‘increasingly’ used Bitcoin ATMs to aid illicit transfers in 2020

Trending