| From: Glenn Petersen | 12/2/2021 10:54:23 AM | | | | | | SoftBank-backed Grab begins trading on the Nasdaq after completing largest-ever SPAC merger
PUBLISHED THU, DEC 2 202110:33 AM EST
UPDATED 2 MIN AGO
Riley de León @RILEYCNBC
CNBC.com
KEY POINTS
-- SoftBank-backed Grab began trading on the Nasdaq on Thursday, becoming the largest-ever company to close a SPAC merger and go public.
-- Shares opened at $13.06 apiece under ticker symbol “GRAB,” following a deal that valued the four-time CNBC Disruptor 50 company at nearly $40 billion.
-- The Southeast Asia ride-hailing giant merged with Altimeter Growth Corp., the blank-check firm led by Altimeter Capital founder and CEO Brad Gerstner.
Indonesia Grab bike riders waiting for passengers in Jakarta. / Afif C. Kusuma | iStock Editorial | Getty Images
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Southeast Asia’s ride-hailing giant Grab began trading on the Nasdaq on Thursday, becoming the largest-ever company to close a SPAC merger and go public. Shares opened at $13.06 apiece under ticker symbol “GRAB,” following a deal with Altimeter Growth Corp. that valued the four-time CNBC Disruptor 50 company at nearly $40 billion.
Grab shares were trending lower after the open.
“Grab is an iconic, mission-driven and founder-led company that makes a difference in the lives of the people and communities it serves. [The company] has demonstrated durable growth even during the pandemic and is playing a foundational role in the digitization of Southeast Asia,” Gerstner stated in a press release.
Grab, ranked No. 16 on last year’s CNBC Disruptor 50 list, delivers an array of digital services such as transportation, food delivery, hotel bookings, online banking, mobile payments and insurance services from its app — earning the “super app” title. It operates in most of Southeast Asia, serving more than 187 million users in over 465 cities across eight countries. Still, revenue at the company was down 9% year-over-year as net losses expanded to $988 million, up from $621 million.
“We don’t view growth and profitability as mutually exclusive. We operate in a market with a large market opportunity and low penetration across our verticals,” Grab co-founder and CEO Anthony Tan said Tuesday on CNBC’s “ Squawk Box.” “We do believe we have a cost leadership advantage.”
A SPAC, which stands for special purpose acquisition company, is created to raise capital from public markets and then use that cash to merge with a private company and take it public within a two-year timeframe.
Investors in SPACs as a rule do not know the identity of the firm that will be targeted for merger. After a blockbuster year, there are currently over 400 SPACs actively looking for a target company, according to data from Wolfe Research.
The Grab deal included a record $4 billion private placement led by Altimeter Capital Management. So-called PIPE financing is a mechanism for companies to raise capital from a select group of investors that make the final market debut possible. BlackRock, T. Rowe Price Associates, Morgan Stanley Investment Management’s Counterpoint Global arm and Janus Henderson Investors are also participating.
“Anthony, [Tan Hooi] Ling, and the rest of the talented management team at Grab have built a superapp across mobility, delivery, and financial services — together which has the potential to fuel the dramatically changing and growing digital economy in Southeast Asia”, said Denny Fish, portfolio manager and technology sector lead at Janus Henderson Investors said in an email to CNBC. “Given its purpose based mission, Grab is in a unique position to benefit from this historical shift.”
The proprietary CNBC SPAC 50 Index, which tracks the 50 largest U.S.-based pre-merger blank-check deals by market cap, soared earlier this year but has since suffered a steep decline and is now negative on the year. The CNBC SPAC Post Deal Index, which is comprised of the largest SPACs that have come to market and announced a target acquisition, has seen its year-to-date gains wiped out.
Still, the SPAC market staged a comeback before the recent market turmoil triggered by the omicron variant, with issuance hitting an eight-month high as the industry continues to ride out regulatory challenges. The number of new deals in October nearly doubled that in September and was also higher than the total during the same time last year, according to SPACInsider and CNBC calculations.
— CNBC’s Yun Li contributed to this report.
SoftBank-backed Grab begins trading after completing SPAC merger (cnbc.com) |
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| From: Glenn Petersen | 12/2/2021 9:03:25 PM | | | | | | Possible short squeeze in 890 5th Avenue Partners, Inc. (stock symbol: ENFA), which approved its merger with BuzzFeed today. Huge redemptions, very low float. ENFA was up $2.51 in afterhours trading to $12.41.
Some background on the deal: Media Industries: Newspapers, TV, Radio, Movies, Online Message Board - Msg: 33598223 (siliconinvestor.com)
Today's news:
BuzzFeed Suffers Wave of SPAC Investor Withdrawals Before Going Public
Digital-media outlet is raising about $16 million in its public listing; it is also raising $150 million in convertible debt
By Benjamin Mullin and Amrith Ramkumar
Wall Street Journal
Updated Dec. 2, 2021 7:15 pm ET
BuzzFeed Inc. will raise roughly $16 million from its public listing, after the blank-check company it is merging with suffered a wave of investor withdrawals, according to a securities filing and people familiar with the situation.
BuzzFeed in June announced plans to go public through a merger with 890 5th Avenue Partners Inc., a special-purpose acquisition company, or SPAC. Also called a blank-check company, a SPAC raises money and lists on a stock exchange with the sole intent of merging with a private firm to take it public.
About 94% of the $287.5 million the SPAC raised has been withdrawn by investors, leaving the digital-media outlet with the remainder, according to the securities filing.
BuzzFeed also raised $150 million in convertible note financing as part of the SPAC deal.
The SPAC’s investors approved the deal Thursday and BuzzFeed is expected to begin trading as a public company on Monday, the securities filing said.
The reduced cash proceeds could put pressure on BuzzFeed’s balance sheet. The company has previously said the merger would put it in position to pursue acquisitions and bring in high-quality executives. The deal is financing the acquisition of Complex Networks Inc., a digital publisher that specializes in streetwear, music and pop culture. BuzzFeed agreed to acquire HuffPost last year. BuzzFeed projected robust revenue growth when it announced the SPAC deal, saying sales would rise about 25% annually through 2024.
BuzzFeed said last month that it generated revenue of $90.1 million in the third quarter, a 20% increase over the year-earlier quarter, thanks to a 39% increase in advertising sales. The company said it lost $3.6 million for the quarter.
SPAC mergers have exploded, in part because the company going public can make business projections that aren’t allowed in traditional initial public offerings.
Many other companies that have pursued SPAC deals have suffered high withdrawals in recent months amid a share-price slump for startups that go public this way.
Since investors in SPACs don’t know what type of deal the SPAC will do, they are allowed to withdraw their money before mergers are completed.
Since the end of July, the average SPAC has lost about 60% of its money before its deal goes through, up from roughly 25% in the first seven months of the year, data from SPAC Research show.
Low share prices often incentivize withdrawals. Like many other blank-check firms, the BuzzFeed SPAC has been trading below its listing price for months.
Unionized employees at BuzzFeed’s news unit staged a walkout on Thursday, saying the company has been unwilling to agree to terms including a salary floor of $50,000 for employees.
BuzzFeed clashed with its largest investor, NBCUniversal, about the SPAC deal and granted the unit of Comcast Corp. concessions before it went through, The Wall Street Journal reported.
To win over NBCUniversal, BuzzFeed Chief Executive Jonah Peretti agreed to set aside 1.2 million shares of BuzzFeed stock, some of which would be granted to NBCUniversal if the shares stay below $12.50. The stock has been trading at less than $10 for most of the last several months.
Only a small percentage of BuzzFeed shares will be available for trading in the public market, as a result of the SPAC investor withdrawals and the fact that some existing stakeholders in the company are prohibited from selling shares for several months, one of the people familiar with the situation said.
Small trading floats can drive outsize moves in the share price because it doesn’t take much buying or selling to move the stock.
A person familiar with BuzzFeed’s strategy said that the investor withdrawals were expected and won’t affect the company’s plans.
BuzzFeed is among several digital-media companies that have turned to mergers and acquisitions for growth to combat the digital-advertising dominance of Alphabet Inc.’s Google and Meta Platforms Inc., formerly Facebook. Vice Media Group earlier this year scrapped a plan to go public through a SPAC, opting instead to raise financing and continue operating privately.
Write to Benjamin Mullin at Benjamin.Mullin@wsj.com and Amrith Ramkumar at amrith.ramkumar@wsj.com
Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the December 3, 2021, print edition as 'BuzzFeed SPAC Stung by Waves of Outflows.'
BuzzFeed Suffers Wave of SPAC Investor Withdrawals Before Going Public - WSJ |
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| To: Triffin who wrote (3212) | 12/2/2021 9:29:32 PM | | From: Glenn Petersen | | | | FST closed at $10.10 today, down $.53. It was up $.30 in aftermarket trading.
Golden Nugget’s Parent Tries to Halt Proposed Deal, but SPAC Says No
Fast Acquisition rejects Fertitta’s move, claims holding company didn’t meet a documents deadline
By Kimberly Chin
Wall Street Journal
Updated Dec. 2, 2021 2:57 pm ET
Golden Nugget parent Fertitta Entertainment Inc. wants out of its SPAC deal, but the acquirer is rejecting the move.
Fertitta said in a letter this week that it plans to terminate its proposed merger with special-purpose-acquisition company Fast Acquisition Corp., on the basis that the agreement didn’t close by Dec. 1, the deal’s termination date.
On Thursday, Fast Acquisition rejected Fertitta’s move to end the deal, adding that the company is bound by its obligations under the agreement. The SPAC said Fertitta delayed providing the required financial documents in time, thereby setting back the deal’s closure process.
“Both sides and all counsel fulfilled all obligations to try and close this transaction before the walk away date,” Fertitta said in an emailed statement, adding that it received regulatory approval too late to close the deal on time.
The fast-spreading Omicron Covid-19 variant, first detected last month, has rattled markets and damped optimism that sectors that were once hit hard by pandemic-related restrictions last year were rebounding.
Fertitta is a holding company for Golden Nugget casinos and Landry’s restaurants, and is owned by billionaire Tilman Fertitta. It announced plans to go public by combining with Fast in February, citing opportunities in the post-pandemic hospitality and online-gambling sector with the accelerated legalization of online and land-based gambling.
The deal includes five Golden Nugget LLC-branded land-based casinos in the U.S. and the Landry’s LLC portfolio of restaurants, which includes Del Frisco’s Double Eagle Steakhouse, Landry’s Seafood House and Bubba Gump Shrimp Co., and nearly half of the shares outstanding in the online-casino platform Golden Nugget Online Gaming Inc. GNOG 0.44% At the time, the deal was valued at roughly $6.6 billion including debt.
The digital-gambling division went public through a SPAC deal struck in 2020. In August, DraftKings Inc. agreed to buy the online-casino platform, extending the sports-betting operator’s online-casino games offering to a broader consumer base with a well-known brand. Fertitta said ending its merger agreement with Fast wouldn’t affect the DraftKings transaction.
In June, the company expanded the Fast deal to include a few more restaurants and entertainment assets. The consideration for Fertitta was also boosted from $1.97 billion to roughly $3.84 billion.
Also known as blank-check companies, SPACs raise money before they develop a business. They use the proceeds to make an acquisition, usually within a couple of years, that converts the target into a public company.
SPACs have raised more than $150 billion this year, nearly doubling last year’s then-record total, according to SPAC Research.
Many SPAC deals have been terminated or restructured in recent months with share prices falling and investor withdrawals surging. Such withdrawals occur when investors pull out their money from the blank-check company before a deal goes through. Low share prices often encourage withdrawals, which can leave the company going public with much less cash than expected and make it harder for it to meet its growth targets.
The average SPAC has lost about 60% of its money since the end of July before its deal goes through, up from roughly 25% in the first seven months of the year, SPAC Research data show.
Write to Kimberly Chin at kimberly.chin@wsj.com
Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the December 3, 2021, print edition as 'Golden Nugget Operator Wants To Scrap Pact to List With SPAC.'
Golden Nugget’s Parent Tries to Halt Proposed Deal, but SPAC Says No - WSJ |
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| To: Glenn Petersen who wrote (3665) | 12/5/2021 11:31:47 AM | | From: Glenn Petersen | | | | Trump social media group raises $1 billion from undisclosed investors
Dan Primack, author of Pro Rata
Axios
December 5, 2021
Donald Trump's social media startup on Saturday announced that it secured $1 billion in new investment as part of its ongoing efforts to become publicly traded via a blank check company.
Between the lines: None of the investors were identified, which is highly unusual for this sort of transaction.
Details: This is a so-called PIPE investment at around $34.36 per share.
-- That's a 20% discount to the SPAC's 5-day trading average through Dec. 1, but still much higher than where a typical SPAC trades before its merger is complete.
-- The PIPE's per share price could be adjusted up or down, based on how the stock performs once the merger closes.
What to watch: Trump Media & Technology Group still has not named a CEO, although the former President is listed as chairman, and does not plan to publicly launch any products until early next year.
Go deeper: Trump deal could spark SPAC crackdown
Trump social media group raises $1 billion from undisclosed investors - Axios |
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| To: kidl who wrote (3673) | 12/6/2021 2:41:57 PM | | From: Glenn Petersen | | | | Quite frankly, I am not sure about the pre-closing disclosure requirements for the PIPE investors. After all, they are not actual investors until the deal closes. It may be that there are no disclosure requirements. The following is from an analysis of the proposed SEC regulations pertaining to the SPACs:
The draft suggests the SEC require disclosure “of the identity and relationship of PIPE investors, and whether any side payments are to be made to certain shareholders as an inducement not to redeem their shares;”
Dell-Jacoby-Reuters-SPAC-Article.pdf (kramerlevin.com)
The names of all of the PIPE investors would be disclosed when the shares are registered, which generally occurs shortly after the close of the transaction. |
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| To: kidl who wrote (3673) | 12/6/2021 2:45:47 PM | | From: Glenn Petersen | | | | Trump Social-Media SPAC Deal Being Investigated By SEC
Inquiry into merger to take former president’s social-media venture public comes after investors piled into the stock
By Amrith Ramkumar
Wall Street Journal
Updated Dec. 6, 2021 11:31 am ET
Regulators are investigating a deal between Donald Trump’s new social-media venture and a special-purpose acquisition company that would take the former president’s company public, according to a Monday securities filing.
The Securities and Exchange Commission is probing a potential merger between Trump Media & Technology Group and the SPAC Digital World Acquisition Corp. DWAC -2.52% , Digital World disclosed Monday. The SPAC is known by its stock ticker, DWAC.
The SPAC said in October that it is taking Mr. Trump’s social-media company public in a deal that valued it at roughly $875 million, including debt.
After the deal was announced, The Wall Street Journal and other media outlets reported that Mr. Trump met with Digital World Chief Executive Patrick Orlando early this year and before the SPAC had raised money. If the meeting is deemed to have represented substantive deal talks, it could violate SEC rules. That is because SPACs aren’t supposed to have a target company identified at the time they initially raise money, analysts say.
The SEC sought information from Digital World in November about its trading policies and communications between the SPAC and Mr. Trump’s company, according to the filing. The SEC also asked for banking records and the identities of some investors, the filing said. It couldn’t be determined whether the SEC is specifically seeking information regarding Mr. Orlando’s meeting with Mr. Trump.
SEC investigations typically focus on whether public companies made accurate disclosures to investors and take months or years to complete. Its civil probes don’t necessarily result in formal allegations of wrongdoing.
Little is known about Trump Media & Technology group’s new social-media platform, Truth Social. PHOTO: JAKUB PORZYCKI/ZUMA PRESS
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SPAC and Trump Media & Technology Group representatives didn’t immediately respond to requests for comment.
Shares of the SPAC fell about 3% to $43.65 Monday. They have still roughly quadrupled since the deal was announced, though they are well below an October intraday peak of $175 after individual investors piled into the stock.
In another sign of investor enthusiasm for the SPAC deal, Digital World said over the weekend that it is raising $1 billion from investors in a private investment in public equity, or PIPE, associated with the merger. That money and some or all of the roughly $287.5 million held by the SPAC could be used to grow Trump Media & Technology Group, though SPAC investors can pull money out before the deal closes.
The PIPE investment and current Digital World SPAC price would value Trump Media & Technology Group at several billion dollars.
Mr. Trump has said the new company aims to combat the dominance of mainstream social-media platforms such as Twitter Inc. and Meta Platforms Inc.’s Facebook. He was banned from such outlets following the January assault on the U.S. Capitol.
Also called a blank-check company, a SPAC is a shell that raises money and trades on a stock exchange with the sole purpose of merging with a private company to take it public.
The Digital World SPAC raised money in early September, then announced its deal in late October, one of the fastest such announcement timelines among the hundreds of blank-check mergers tracked by SPAC Research.
After regulators review the private company’s financial information and the deal is completed, the private company replaces the SPAC in the stock market.
In the coming months, Trump Media & Technology Group would have to disclose its ownership structure and business information before the deal closes. Little is known about the new company and its social-media platform Truth Social.
The $1 billion in PIPE commitments still put the company among a select group of companies that choose to go public through SPACs. Only a few well-established companies, including Southeast Asian app operator Grab Holdings Ltd., electric-vehicle maker Lucid Group Inc., and personal-finance app operator SoFi Technologies Inc. have raised at least that amount.
The SEC has ramped up scrutiny of SPAC deals in recent months amid concerns that such mergers disproportionately benefit insiders through unique incentives at the expense of other investors.
Such mergers have exploded as alternatives to traditional initial public offerings in the past year, in part because they allow companies going public to make business projections that aren’t allowed in IPOs.
—Dave Michaels contributed to this article.
Write to Amrith Ramkumar at amrith.ramkumar@wsj.com
Trump Social-Media SPAC Deal Being Investigated By SEC - WSJ |
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