The extent of my knowledge is that SPACs are useful tools to get a company to go public. I know that they look for "targets" to take public, and they deal with all the outreach and financial structuring. What I don't know is how the deals are actually structured, how they are valued, and what the risks are. 1) Deal structuring Do SPACs end up acquiring private companies or do they get acquired? Or does that kind of depend on how the capital structure works out? 2) Valuation Essentially, if I'm investing in a SPAC, am I making some sort of Merger Arb move? How is SPAC's valuation determined
28 Jan 2021
I got a job at a SPAC a few weeks/months ago and thought I'd share a few reflections. It is really lean/light. SPACs have limited working capital that they have to pay for everything (lights, market data, salaries, D&O insurance, etc.) for their search period. So you won't get the Bloomberg accounts, access to GLG, etc. SPAC leaders have very specific ideas in mind for who they want to hire. My SPAC was looking for juniors with X years of IB, Y years of PE, and deep deal experience in Z. They are not looking for the generalist all-around-athletes. They source through personal networks and luck
09 Feb 2021
Consider this situation: A SPAC investor receives 1 warrant and a one unit of common stock in exchange for a $10 investment. The SPAC investor later decides to exercise his redemption option on the unit of common stock, recouping his original $10 investment. However, he gets to keep the 1 warrant. He later sells the warrant on the open market for $1, achieving a riskless 10% return. Based on what I've read about SPACs, this appears to a realistic scenario. If this is possible, why doesn't everyone redeem their SPAC shares and sell their warrant for a profit? It seems to be easy money. I'm sure
15 Aug 2021
Do most banks have a dedicated SPAC team within IB? Do SPAC teams usually work in tandem with ECM and M&A or do they handle the modeling themselves? What type of exit opps do junior bankers on these teams usually have? Looking at the league tables this year, it seems the BBs have stepped up their game whereas in the past CS and Cantor were the top banks for SPACs. Does anyone working in the industry have any outlook on the direction of the super hot SPAC market right now? I have been having some trouble finding info about SPACs on here and any input is greatly appreciated, feel free to pm me
02 Sep 2020
The way I understand it, when a SPAC goes public, it has a certain number of shares outstanding and trades around $10/share until it finds a company to merge with. Once a target company is selected, the SPAC mergers with the target and the target becomes a public company. Similar to an IPO, the target receives the SPAC's IPO proceeds as a source of funding and the SPAC shares are turned into target company public shares, diluting the target's current private shareholders. But every SPAC has a set number of shares outstanding all set at a price of $10. If the SPAC merges with a target who's
23 Apr 2021
Hey guys, My question is, say I want to conduct an IPO or a listing through a SPAC and I want to do this by myself without paying an investment bank, how would I go about this and where can I / how should I learn more about the entire process? This is more out of curiosity since I don't really work in finance anymore, I used to be a trader but I'm now enrolled in a PhD. I'm asking this because recently SPACs seem to be really popular and I have a friend who used to work almost exclusively on SPAC listings. This friend of mine has very impressive networking skills, is extremely mature for his
25 Jul 2020
Just curious, does anyone know of any junior or mid level employees who currently work or have previously worked at an "independent" SPAC like CF Corporation? I'm wondering how people land such gigs and what happens once a deal is in hand. It seems like it would be an interesting experience, but I don't know if they generally even have investment teams beyond the founders.
16 Aug 2018
Some of you might cringe reading this so apologies ahead of time. https://www.bvp.com/news/microacquire-helps-start… Saw this article, basically TLDR Bessemer invested a mint into an online market place for purchasing whole startups, (100% equity). Are we going to start seeing people raising like tiny funds to go purchase a startup from wanning management, assemble a half decent team then go to try to raise at a higher valuation? Is this already being done? Is this a stupid question? Let me know. Thanks.
10 Jul 2021
Hi Monkeys - I am wondering if it is possible for a SPAC to merge with a company that is already public. The purpose of such a transaction could be a couple of things: existing public company doesn't want to go through the process of a share issuance to raise new cash foreign public company wants to reverse-merge into US-listed entity + raise cash SPAC merges with public company + private target to create NewCo Has anyone seen something like this? Is it even legal per FINRA / SEC guidelines? Thanks for any insight.
22 Jun 2021
'Perella Weinberg Partners, the investment bank founded by Joe Perella and Peter Weinberg, is seeking to pursue a long-awaited public listing through merging with a blank-check firm' (via Bloomberg) Thoughts?
19 Nov 2020
In an acquisition process with a SPAC and a strategic buyer, what do you see as the key differentiators that a strategic buyer can offer a start-up target that a SPAC can't and vice versa? For example - Strategic buyer offers a full cash out at completion vs lock-ins under SPAC process. - More risk in a SPAC process as SPAC still needs to get shareholder approval. - Management team would need to spend more time in external investor relations if bought our by a SPAC compared with a strategic buyer where they can focus on growing the company.
06 Oct 2020