I’ve said several times I feel “all SPAC, all the time” recently. That’s a little bit of an exaggeration; I’ve been managing to research things other than SPACs…. but it’s not much of an exaggeration. I wrote five different public articles on SPACs this month:
You might be interested in looking into pipe terms. If you're not spac ed out. CAP, now Doma, did a $300 mm dollar pipe with good names - "accounts managed by BlackRock, Fidelity , The Gores Group, Hedosophia, SB Management, a subsidiary of SoftBank Group Corp., and Wells Capital. Existing Doma shareholder, Lennar, has also committed to the PIPE and Spencer Rascoff, co-founder and former CEO of Zillow Group,"
Have they all really lost 30%? Or were the terms not actually $10 per share. Were they given founders warrants? Shares? Was there some other undisclosed incentive? Owners of the target, like Lennar, have an incentive to get it public. If they raise their average a little it's worth it to get the deal done. But there's very little disclosure on pipe buyers, like dollar amounts per buyer. DOMA had 85% redemptions btw. In retrospect the whole thing smells to me. The sponsor, Capital, is a quality sponsor. And yes there are worse examples. Atip for instance.
Thanks a lot for your insights. Great article! Just two things which I am a little bit puzzled about:
Regarding the suspected sell-off before the voting date of Celularity and GX: Don´t all investor which hold the shares on the record date are able to vote for redemption until the voting date, so July 14th? So there would not be any pressure to sell before, but rather directly after that.
And secondly, regarding the incentives for the target company when redemptions are high: From my perspective among SPAC companies are a lot which are not able to get funding elsewhere. Although high redemptions may improve their negotiation power, I assume that most of them would even go with any funding instead of letting the deal slip away. At the same time, they gain access to the public market, where you can issue new shares afterwards. The question is of course if you are able to raise any more money afterwards when you are in a negative signal vicious circle being a Zombie SPAC from the beginning.
You might be interested in looking into pipe terms. If you're not spac ed out. CAP, now Doma, did a $300 mm dollar pipe with good names - "accounts managed by BlackRock, Fidelity , The Gores Group, Hedosophia, SB Management, a subsidiary of SoftBank Group Corp., and Wells Capital. Existing Doma shareholder, Lennar, has also committed to the PIPE and Spencer Rascoff, co-founder and former CEO of Zillow Group,"
Have they all really lost 30%? Or were the terms not actually $10 per share. Were they given founders warrants? Shares? Was there some other undisclosed incentive? Owners of the target, like Lennar, have an incentive to get it public. If they raise their average a little it's worth it to get the deal done. But there's very little disclosure on pipe buyers, like dollar amounts per buyer. DOMA had 85% redemptions btw. In retrospect the whole thing smells to me. The sponsor, Capital, is a quality sponsor. And yes there are worse examples. Atip for instance.
Thanks for sharing your work.
Thanks a lot for your insights. Great article! Just two things which I am a little bit puzzled about:
Regarding the suspected sell-off before the voting date of Celularity and GX: Don´t all investor which hold the shares on the record date are able to vote for redemption until the voting date, so July 14th? So there would not be any pressure to sell before, but rather directly after that.
And secondly, regarding the incentives for the target company when redemptions are high: From my perspective among SPAC companies are a lot which are not able to get funding elsewhere. Although high redemptions may improve their negotiation power, I assume that most of them would even go with any funding instead of letting the deal slip away. At the same time, they gain access to the public market, where you can issue new shares afterwards. The question is of course if you are able to raise any more money afterwards when you are in a negative signal vicious circle being a Zombie SPAC from the beginning.