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You can't buy "some" of an acronym. SPAC is not a company. There are companies that are SPACs. If you are asking which companies are SPACs then the question is on which board do you want to trade? If the NYSE or AMEX, google "NYSE SPAC company" and look for lists.
No yes I know but didn’t know if I was able to buy some how or where and what under.
Are you joking or do you not know that SPAC isn't a ticker but an acronym?
Where can I buy spac. I have been looking and googling?
Wouldn’t touch anything related to Trump.
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TMTG: New Trump social media company to go public via SPAC merger
Written By Terry Ponick | Oct 21, 2021
Election 2020, The Deplorables Strike Back, Jim Cramer, Trump tweets, Peggy Noonan, RINO
Trump as the Destructor. Image by the author, based on screen capture of YouTube video trailer for the original “Ghostbusters.” (© 1984, Columbia Pictures. Fair use of image for satirical purposes.)
WASHINGTON – Donald Trump announced Wednesday that he is formally launching his long-awaited new media company. Among other ventures the Trump Media & Technology Group (likely listing symbol: TMTG) will go public via a SPAC merger transaction. The new company’s plans include the launch of its own social media platform, TRUTH Social. The new TRUTH Social app is already available for pre-order on Apple’s App Store.
TMTG is currently working on an agreement to go public by merging with Digital World Acquisition Corp. (NASDAQ:DWAC), an already existing Special Purpose Acquisitions Company (SPAC). Such transactions involve a merger between the two entities, with the SPAC generally adopting the new company’s name and symbol. The new company and surviving entity – in this case TMTG – effectively “goes public.” This avoids the time, cost, expense and SEC vetting procedures involved in a standard IPO.
Fighting the socialist Narrative
The new company’s mission tracks closely with what the former president has hinted at for months. He has consistently promised to create a rival to the Big Tech and Big Media monopolies that have teamed together for years to censor and exclude writers, scholars, politicians, personalities and voices – including Trump – from expressing views that stray from the now dominant socialist Narrative.
“We live in a world where the Taliban has a huge presence on Twitter, yet your favorite American President has been silenced,” Trump said in a formal statement quoted in an Associated Press story. “This is unacceptable.”
AP: “TMTG has not set its sights low.”
“In addition to the Truth Social app, which is expected to soft-launch next month with a nationwide rollout early next year, the company says it is planning a video-on-demand service dubbed TMTG+ that will feature entertainment programming, news and podcasts.
“One slide in a TMTG presentation on its website includes a graphic of TMTG’s potential competitors, which range from Facebook and Twitter to Netflix and Disney+ to CNN. The same slide suggests that over the long term TMTG will also become a power in cloud computing and payments and suggests it will go head-to-head with Amazon, Microsoft, Google and Stripe.”
More on DWAC: The numbers
The AP states that DWAC is based in Miami, but brokerage firms list its formal contact location as San Diego. AP does provide additional financial information.
“[DWA’s] Sept. 8 IPO raised $287.5 million, according to a filing with the Securities and Exchange Commission.
“[Digital World Acquisition Corp] said it has raised roughly $293 million in cash, which it will use to grow TMTG’s ventures. Among the company’s biggest shareholders are several institutional investors, including Lighthouse Investment Partners, D. E. Shaw & Co., and Radcliffe Capital Management, according to an SEC filing.
“The deal has an initial enterprise value, a measure that takes into account a company’s total debts and assets, of $875 million, according to the release.”
Wednesday trading action in DWAC and related shares will be volatile
Trading on the NASDAQ, DWAC shares were trading at ~$14.44 per share Wednesday morning at 10 a.m. ET, up some 14% from Wednesday’s close. Associated warrants (DWACW) have jumped 684% (from $0.51 to $4.00 per warrant), and associated units (DWACU) are up 59% from Wednesday and currently trade at $16.20 per unit.
In general, warrants function like long-term options entitling the holder to acquire corporate shares at a specific price. Regarding DWAC’s units, we can define a unit as a share of stock plus an attached warrant. But in either case, if the owner does not exercise the warrant by a certain date, it expires worthless, just like an option.
Final note
Traders and investors should note that at this point, investing in this evolving entity involves a high level of risk. Given today’s news, trading in all these shares could involve highly volatility, due to political and business implications.
Tags: DWAC, SPAC merger, Terry Ponick, TMTG, Trump media
Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Senior Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17
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SEATGEEK-REDBALL MERGER A BET ON TICKET MARKET CONVERGENCE
October 18, 2021
Last week, it was announced that SeatGeek had entered into a definitive business combination agreement with RedBall Acquisition Corp. (NYSE: RBAC), a special purpose acquisition company. The deal values the combined enterprise at $1.35 billion.
The SPAC led by RedBird Capital Partners managing partner and CEO Gerry Cardinale and baseball executive Billy Beane, of Moneyball fame, is the second to come to terms with a ticketing firm in the last six months. Back in April, Horizon Acquisition Corp. (NYSE: HZAC) entered into a definitive merger agreement with Vivid Seats. General Sports Worldwide managing director Lou DePaoli, who has 27 years of senior leadership experience across multiple sports teams, leagues and markets, explained the interest in and around the ticketing business is driven by the ongoing convergence of the primary and secondary markets. “SeatGeek, Vivid—with Todd [Boehly] and his group at Horizon doing the same thing—StubHub and viagogo, you’re seeing a lot of [investments] in this space because [these companies] are all going to try to create that single marketplace where [a ticket buyer] can do everything and anything, easily.”
JWS’ Take: While the seamless single marketplace DePaoli speaks of is the endgame, the move toward it began more than two decades ago, when online secondary marketplaces first began popping up. DePaoli said the gradual shift has largely taken place behind the scenes, with consumers mostly unaware it was happening.
The teams and leagues who issue tickets are responsible for the convergence of the two markets. Initially, they sought to eliminate the arbitrage opportunity that existed on the secondary market. But as sports organizations got smarter about dynamic pricing and gained access to better pricing tools, margins on the secondary market slimmed. “The spread between what the team is offering on the primary and what is being sold on the secondary is much, much narrower than it used to be,” DePaoli said.
Now the push to mesh the primary and secondary markets “is really all about data,” DePaoli said. Teams and leagues want the insights gathered during secondary market transactions so they can better understand who their customers are, build models to better engage those customers and to derive more revenue from them. For perspective, DePaoli estimated that in the past, for a big game, a club may have only had data on 50-60% of the tickets sold, and much less on those fans actually in attendance due to tickets being resold and/or shared.
The differentiation between the primary and secondary markets is less and less important to the end-user. “In the minds of the consumer it is already one marketplace. The consumer is more concerned with getting the seats they want at the price they want to pay than which provider they are purchasing them from,” DePaoli said. The question is which ticketing company is best positioned to capitalize on the shift.
Ticketmaster dominates the primary market and has the largest universe of clients and purchasers, while StubHub, SeatGeek and Vivid Seats are the major players in the secondary market business. DePaoli believes SeatGeek is in a “really good spot” in the shifting landscape. In fact, he believes the company is best-positioned, “based on their market share and technology” to take advantage. Vivid, which he put in the next-best position, has recently got the backing of DraftKings. The company is among the PIPE investors affiliated with the HZAC-Vivid merger.
SeatGeek is also being more aggressive than its competitors at trying to merge primary and secondary markets. By doing so, it may have built a better mousetrap. Research has shown fans who use the platform to purchase primary market tickets are much more likely to use it again for other unrelated events. So, in theory, the more primary business the company can attract (see: existing deals with the Dallas Cowboys, Brooklyn Nets, MLS and the EPL), the more secondary business they should be able to develop.
While it won’t be any cheaper for SeatGeek to acquire primary business than it will be for competing marketplaces to spend on the paid search and marketing that drives their businesses, it is seemingly a better use of marketing funds. Over time, the primary business can be profitable, and in the short-term, while the company is still spending more than they make, primary can feed the secondary business. Merging with RedBall should help to expand their network of team/league relationships, and the public markets will provide the capital needed to invest in more primary relationships.
The demographics of the SeatGeek user base indicate the company is well-positioned to operate in a single-platform environment. SeatGeek customers are younger, more comfortable using mobile technology and do not differentiate between primary and secondary markets as much as those using competing platforms. Their customer base is primarily concerned about the cost of the ticket, its authenticity and the ease of the user experience.
SeatGeek, a tech-first company, is also well-positioned should the ticketing industry transition to blockchain technology, as Monumental Sports & Entertainment CEO Ted Leonsis suggested it would. “Being at our core a technology company gives us a huge advantage as we bring ticketing into the internet age and then leverage emerging technologies to reinvent the space, which we’re already doing,” SeatGeek CEO Jack Groetzinger said. “We’re focused on extending our technology advantage in four key areas: blockchain ticketing, machine-learning pricing, biometric identity and at-event experiences.”
Despite the company’s seemingly strong prospects, RBAC did not pop on initial reports of the deal. That is not necessarily indicative of the market’s thoughts on the business’ fundamentals. It’s more likely a function of the way many hedge fund traders are trading SPACs in general right now (think: separating stock from warrant, shorting stock and long on warrant). Warrants were up about 60% on 1,000 times the prior day’s volume on the news (when trading was halted on Oct. 8). Prices held flat once the business combination was announced last week indicating the market was satisfied by the terms.
As a publicly traded company, RedBall declined to comment on the deal.
**
Important Additional Information and Where to Find It
In connection with the proposed transaction (the “proposed business combination”) between RedBall Acquisition Corp. (“RedBall”) and SeatGeek, Inc. (“SeatGeek”), RedBall intends to file a registration statement on Form S-4 (“Registration Statement”) with the Securities and Exchange Commission (the “SEC”), which will include a proxy statement/prospectus of RedBall, that will be both the proxy statement to be distributed to holders of RedBall’s ordinary shares in connection with its solicitation of proxies for the vote by RedBall’s shareholders with respect to the proposed business combination and other matters as may be described in the Registration Statement, as well as the prospectus relating to the offer of the securities to be issued in the business combination to SeatGeek stockholders. After the Registration Statement is declared effective, RedBall will mail a definitive proxy statement/prospectus to the shareholders of RedBall as of a record date to be established for voting on the proposed business combination. This document does not contain all the information that should be considered concerning the proposed business combination and is not intended to form the basis of any investment decision or any other decision with respect to the business combination. Before making any voting or investment decision, investors and security holders of RedBall and other interested persons are urged to carefully read the entire Registration Statement, the preliminary proxy statement/prospectus and the definitive proxy statement/prospectus, when they each become available, and any other relevant documents filed with the SEC, as well as any amendments or supplements to these documents, because they will contain important information about the proposed business combination. The documents filed by RedBall with the SEC may be obtained free of charge at the SEC’s website at www.sec.gov. In addition, the documents filed by RedBall may be obtained free of charge from RedBall at www.redballac.com. Alternatively, these documents, when available, can be obtained free of charge from RedBall upon written request to RedBall Acquisition Corp., 667 Madison Avenue, 16th Floor, New York, NY 10065. The information contained on, or that may be accessed through, the websites referenced in this document is not incorporated by reference into, and is not a part of, this document.
Participants in the Solicitation
RedBall and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of RedBall with respect to the proposed business combination. For information regarding RedBall’s directors and executive officers and a description of their interests in RedBall, please see Redball’s final prospectus related to its initial public offering filed with the SEC on August 13, 2020 and available free of charge at the SEC’s website at www.sec.gov. To the extent such holdings of RedBall’s securities may have changed since that time, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Registration Statement and proxy statement/prospectus and other relevant documents when they become available.
SeatGeek and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the shareholders of RedBall in connection with the proposed business combination. A list of the names of such directors and executive officers and information regarding their interests in the proposed business combination will be included in the Registration Statement and proxy statement/prospectus for the proposed business combination when available.
Forward-Looking Statements
Certain statements included in this document constitute forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding estimates and forecasts of other financial and performance metrics, the proposed business combination and expectations regarding the combined business, and projections of market opportunity. These statements are based on various assumptions, whether or not identified in this document, and on the current expectations of the respective management of SeatGeek and RedBall and are not predictions of actual performance. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the control of SeatGeek and RedBall. These forward-looking statements are not intended to serve as, and must be not relied on by an investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of SeatGeek and RedBall. These forward-looking statements are subject to a number of risks and uncertainties, including, but not limited to, the impact of the COVID-19 pandemic; changes in domestic and foreign business, market, financial, political, and legal conditions; the inability of the parties to successfully or timely consummate the proposed business combination,
including the risk that the approval of the shareholders of RedBall or SeatGeek is not obtained or the failure of other closing conditions; the risk that any regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect the combined company or the expected benefits of the proposed business combination; failure to realize the anticipated benefits of the proposed business combination; the inability to obtain or maintain the listing of RedBall’s shares on the NYSE following the business combination; costs related to the business combination; the risk that the business combination disrupts current plans and operations as a result of the announcement and consummation of the business combination; risks relating to the uncertainty of the projected financial information with respect to SeatGeek; risks related to the performance of SeatGeek’s business and the timing of expected business or revenue milestones; the effects of competition on SeatGeek’s business; the amount of redemption requests made by RedBall’s stockholders; the ability of RedBall or SeatGeek to issue equity or equity-linked securities or obtain debt financing in connection with the proposed business combination or in the future; and those factors discussed in RedBall’s final prospectus filed with the SEC pursuant to Rule 424(b)(4) on August 13, 2020 under the heading “Risk Factors,” and other documents RedBall has filed, or will file, with the SEC, including a registration statement on Form S-4 in connection with the business combination. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that neither RedBall nor SeatGeek presently know, or that RedBall or SeatGeek currently believe are immaterial, that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect RedBall’s and SeatGeek’s expectations, plans, or forecasts of future events and views as of the date of this document. RedBall and SeatGeek anticipate that subsequent events and developments will cause RedBall’s and SeatGeek’s assessments to change. Nothing in this document should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date of this document. RedBall and SeatGeek do not undertake any obligation to update these forward-looking statements and RedBall and SeatGeek specifically disclaim any obligation to do so.
No Offer or Solicitation
This document does not constitute (i) a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed business combination or (ii) an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any security of RedBall, SeatGeek or any of their respective affiliates, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
https://ih.advfn.com/stock-market/NYSE/redball-acquisition-RBAC/stock-news/86311803/filing-of-certain-prospectuses-and-communications
Great info on Sandridge (SD). Institutional investors increasing their positions.
https://zolmax.com/investing/sandridge-energy-nysesd-hits-new-12-month-high-at-14-30/6329354.html
Chamath Palihapitiya files for four new SPACs, with a new focus
Four new filings each have specific biotech focus, seek to raise at least $200 million apiece
https://www.marketwatch.com/story/chamath-palihapitiya-files-for-four-new-spacs-with-a-new-focus-11622671916
lol. Handy little guy.
www. TINY url.com
I like it!!
Financials SPAC Serendipity Capital Acquisition files for a $250 million IPO
May 7, 2021
https://www.renaissancecapital.com/IPO-Center/News/81590/Financials-SPAC-Serendipity-Capital-Acquisition-files-for-a-$250-million-IP
WSJ: "SPACs we're watching":
3-D Printing SPAC anyone?
GLTA
https://www.foxbusiness.com/media/forbes-pursues-spac-talks-amid-new-takeover-interest-sources
Forbes pursues SPAC talks
Topps($MUDS): A Well Priced Company With Substantial ($28) Upside
https://seekingalpha.com/article/4421338-topps-well-priced-company-substantial-upside
Hot SPAC Topps($MUDS), former Disney Chair/CEO https://www.bloombergquint.com/business/a-baseball-card-spac-shows-why-distressed-investing-is-so-hard
spacs fun while it lasted, holding only two spacs now, one of them only because of ackman behind it lol.
SoftBank-backed Grab agrees to deal to go public in world's largest SPAC merger https://www.cnbc.com/2021/04/13/softbank-backed-grab-agrees-to-deal-to-go-public-in-worlds-largest-spac-merger.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard
SEC Drops Accounting Bomb, Blows Up SPAC Boom
https://www.zerohedge.com/markets/sec-drops-accounting-bomb-blow-spac-boom
GMII/Sonder, "backed by Jeff Bezos and Elon Musk." ->
https://www.cnbc.com/2021/02/20/how-francis-davidson-started-sonder-in-college-apartment.html
GMII/Sonder: https://en.wikipedia.org/wiki/Sonder_Corp.
GMIIU/GMII/GMIIW wiggling....fat finger trade get her going or is something coming???
$MUDS warrants are '27 maturity?! Wow!
$MUDS-Eisner(formerDisney) to buy TOPPS Cards, Enter NFTs, crypto
https://www.cnbc.com/2021/04/06/baseball-card-company-topps-to-go-public-through-spac-deal.html?fbclid=IwAR3lOrX0PJAtW_aWVJMi295DntaTkeMmxmNC3kcfkZG2LK26BkOrMv3ht8U
https://www.sec.gov/Archives/edgar/data/1820727/000110465921046855/tm2112182d1_ex99-2.htm
The ONLY OTC stock with a SEC effective SPAC is NIHK which is focused on EV and EV batteries. Recent announcement of a JV with EV maker Lingstar. CEO explains NIHK with goals of uplisting to the Nasdaq in his first interview that went out last night. BTW Frank is an attorney and CPA so he was able to succeed with SEC approval. NIHK also had some help from George Sharp along the way. NIHK is not diluting either - I’ll post pics for you to compare.
https://wallstreetanalyzer.com/2021/04/01/video-river-networks-inc-otc-nihk/
They are not SPACs. They are shells. Big difference.
#SPAC @ $SNDL Sundial And SAF Group Recently Announced a 50/50 Joint Venture Through SunStream Bancorp To 'focus on cannabis-related verticals,' Sundial To Make Initial Commitment Of $100M; The JV Also Plans Other Mandates, Including A SPAC
Anyone here in Lazar’s ARAT or EGOC?
BOWX
BowX Acquisition Corp.
$THCB https://twitter.com/alexcutler247/status/1375438143185375243
@Microvast
x
@SAFRAN
contract!
WeWork to go public through merger with BowX Acquisition--WSJ
$BOWX $BOWXW
Published: March 26, 2021 at 6:23 a.m. ET
By Tomi Kilgore
WeWork will be going public after the flexible office space company has agreed to merge with special purpose acquisition company BowX Acquisition Corp. in a deal valuing WeWork at $9 billion, including debt, according to a Friday report in The Wall Street Journal. BowX shares rallied 4.8% in premarket trading. WeWork would raise $1.3 billion in the deal, including $800 million in private investment in public equity (PIPE) from Insight Partners, funds managed by Starwood Capital Group, Fidelity Management and others, the WSJ report said. In 2019, an investment from Japan-based technology investor Softbank Group Corp....
SPACS are great for retail investors. They all start at $10.00
You don't have to chase an IPO, to get a piece of the action, after it opens up 40% on the first day of trading.
Thanks for sharing ...
I absolutely HATE this sector
Mars is for Martians
Cathie Wood's space ETF to launch as soon next week as famed investment manager readies first fund since 2019
https://markets.businessinsider.com/news/stocks/cathie-wood-space-ark-etf-launch-first-fund-since-2019-2021-3-1030247159
as it should be. There are some really good spac deals happening and some that are ruining the entire sector.
Of course they are. Retail investors getting into something that requires less disclosure than an IPO. I see the SEC making SPACs give the same info as required for IPOs.
SPAC Deal: Genesis Park (GNPK) taking Space Infrastructure Company Redwire Public
https://www.thestreet.com/boardroomalpha/spac/spac-deal-gnpk-redwire
The SEC may be worried about the depth of due diligence SPACs perform before acquiring assets, and whether huge payouts are fully disclosed to investors, said a third source.
SEC opens inquiry into Wall Street’s blank check IPO frenzy: Reuters, citing sources
https://www.cnbc.com/2021/03/25/sec-opens-inquiry-into-wall-streets-blank-check-ipo-frenzy-reuters.html
pink sheet shells have zero cash value whereas a SPAC is a pile of cash looking for a high impact business. This forum is not a discussion point for sub penny lottery tickets. Sure some people get a ten bagger on some of them. Most get delisted with 100% losses.
A special purpose acquisition company (SPAC) is a corporation formed for the sole purpose of raising investment capital through an initial public offering (IPO). Such a business structure allows investors to contribute money towards a fund, which is then used to acquire one or more unspecified businesses to be identified after the IPO.
When the SPAC raises the required funds through an IPO, the money is held in a trust until a predetermined period elapses or the acquisition is made. In the event that the planned acquisition is not made or legal formalities are still pending, the SPAC is required to return the funds to the investors, after deducting bank and broker fees.
A special purpose acquisition company is formed by experienced business executives who are confident that their reputation and experience will help them identify a profitable company to acquire. Since the SPAC is only a shell company, the founders become the selling point when sourcing funds from investors.
The founders provide the starting capital for the company and they stand to benefit from a sizeable stake in the acquired company. The founders often hold an interest in a specific industry when starting a special purpose acquisition company.
When issuing the IPO, the management team of the SPAC contracts an investment bank to handle the IPO. The investment bank and the management team of the company will agree on a fee to be charged for the service, usually about 10% of the IPO proceeds. The securities sold during an IPO are offered at a unit price, which represents one or more shares of common stock.
The prospectus of the SPAC mainly focuses on the sponsors, and less on company history and revenues since the SPAC lacks performance history or revenue reports. All proceeds from the IPO are held in a trust account until a private company is identified.
After the SPAC has raised the required capital through an IPO, the management team has 18 to 24 months to identify a target and complete the acquisition. The period may vary depending on the company and industry. The fair market value of the target company must be 80% or more of the SPAC’s trust assets.
Once acquired, the founders will profit from their stake in the new company, usually 20% of the common stock, while the investors receive an equity interest according to their capital contribution.
In the event that the predetermined period lapses before an acquisition is completed, the SPAC is dissolved, and the IPO proceeds held in the trust accounts are returned to the investors. When running the SPAC, the management team are not allowed to collect salaries until the deal is completed.
A SPAC floats an IPO to raise the required capital to complete an acquisition of a private company. The capital is sourced from retail and institutional investors, and 100% of the money raised in the IPO is held in the trust account. In return for the capital, investors get to own units, with each unit comprising a share of common stock and a warrant to purchase the common stock at a later date.
The purchase price per unit of the securities is usually $10.00. After the IPO, the units become separable into shares of common stock and warrants, which can be traded in the public market. The purpose of the warrant is to provide investors with additional compensation for investing in the SPAC.
The founders of the SPAC will purchase founder shares at the onset of the SPAC registration, and pay nominal consideration for the number of shares that results in a 20% ownership stake in the outstanding shares after the completion of the IPO. The shares are intended to compensate the management team, who are not allowed to receive any salary or commission from the company until a combination transaction is completed.
The units sold to the public comprise a fraction of a warrant, which allows the investors to purchase a whole share of common stock. Depending on the bank issuing the IPO and the size of the SPAC, one warrant may be excisable for a fraction (either half, one-third or two-thirds) or a full share of stock.
For example, if a price per unit in the IPO is $10, the warrant may be exercisable at $11.50 per share. The warrants become exercisable either 30 days after the De-SPAC transaction or twelve months after the SPAC IPO.
The public warrants are cash-settled, meaning that the investor must pay the full cost of the warrant in cash to receive a full share of stock. Founder warrants, on the other hand, maybe net settled, meaning that they are not required to deliver cash to receive a full share of stock. Instead, they are issued with shares of stock with a fair market value equal to the difference between the stock trading price and the warrant strike price.
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