Well, wouldn’t you just know it.
Someone flashes the £££ signs in front of a celebrity or two and, hey presto, all aboard the SPAC train.
On the face of it, celebrities wouldn’t necessarily be interested in SPACs (Special Purpose Aquisition Companies), however, the so-called ‘hottest trend in finance’ is a buzz phrase that not even they can ignore.
Show me the money indeed.
Shaquille O’Neal SPAC Company Investement
Basketball star Shaquille O’Neal is one such well known public figure who has sponsored a SPAC, essentially helping to raise money for the ‘blank cheque’ company so that it can list on the stock market.
So, what is a SPAC and why are celebrities interested all of a sudden?
Simply put, it’s a quick route to capital.
Once an opportunity to invest in a privately owned business becomes available, the route to the stock market is easier and cheaper than an IPO thanks to the reverse merger facility.
Should the process complete – it doesn’t always – then anyone that decided to buy into the SPAC can either sell once the purchase has been revealed, or keep hold of the investment.
Sir Richard Branson SPAC Investment
Sir Richard Branson is another getting in on the act, with his Virgin Galactic venture invested in via SPAC back in 2019.
However, the idea isn’t new.
It’s been bubbling under the surface for centuries, albeit once something becomes in vogue it’s always going to be popularised and patronised by the celebrity nouveau riche.
Branson wanted investment from the Saudi Arabian government, but the murder of Jamal Khashoggi, believed to have been Saudi-sanctioned, saw him pull out.
Instead, he went down the reverse merger route with a SPAC investment organised by Hedosophia, a New York-listed Social Capital.
The company was run by Chamath Palihapitiya, the former Facebook executive who also undertook a second SPAC, a $4.8bn merger with Opendoor, a SoftBank-backed property startup.
Joanna Coles SPAC Investment
Former Cosmopolitan editor, Joanna Coles, merged Northern Star Investment Corp II, her $400m vehicle, with an obscure financial company, Apex Clearing, in a $4.7bn SPAC deal which will allow investment in ‘disruptive’ technologies.
Ease and speed of the deal are obvious attractions because there are no investment ‘roadshows’ required. No prospectus needed either. Once negotiations with a SPAC begins, the funding is already in place.
WGP Global are at the forefront of the SPAC revolution in the UK.
The UK, and London-based companies in particular, are long-overdue a gold rush given that in 2020 only £30m was raised via SPACs compare to £63.5bn in the US.
The easing of rules in London, to fall in line with New York will almost certainly see a huge uptake in old Blighty, with those deals unlikely to fall through.
So says New York investment firm GP Bullhound heavyweight, Adam Birnbaum, who is working on multiple SPAC deals at present.
Leading the sports star SPAC take up is Shaquille O’Neal.
His role as strategic adviser to the $250m Forest Road Acquisition Corp doesn’t sit too well with us, but to give the ex-basketball star credit, he has managed to pull off a three-way merger with MYX Fitness and the Beachbody Company.
He has also leading a group that includes three former Disney executives and Martin Luther King Jr’s sons, that are looking to purchase a media company and launch it under the Forest Road Acquisition II banner.
Serena Williams SPAC Interest
Female tennis’ most successful ever player, Serena Williams, is another to see the potential of SPACs. Jaws Spitfire Acquisition is a SPAC that raised $300m to target consumer technology companies, and Williams is on the board of directors.
Clearly not wanting to get left behind, retired baseball player, Alex Rodriguez, is the chief executive of a SPAC that wans to raise $500m; Slam, whilst Colin Kaepernick is behind another SPAC.
It’s game on but in a whole different ball game.
“The reality is that these SPACs will go somewhere, so subject to adequate protections, it is surely better to attract them to London than allow this business to go elsewhere,” former banker, Paul Lynam, said.
The FCA will set the rules in stone later in the year, with the UK Government and a large portion of business in the City believed to be fully behind the move.
If you want a piece of the action, then we at WGP Global suggest you get in touch with us TODAY.