Luxury goods billionaire Bernard Arnault has joined the hoards of investors and celebrities launching blank-check companies, and has teamed up with the former head of Italian financial services firm UniCredit to launch a SPAC.
The world’s fourth-richest person and owner of LVMH has teamed up with former UniCredit chief executive Jean Pierre Mustier to create a special-purpose acquisition company with a focus on “innovative” European financial firms.
A special-purpose acquisition company – or SPAC – is an entity that exists solely to list on the stock exchange to raise money, in the hope of finding and merging with a target company to take it public.
More than 140 SPACs have gone public in the US this year, raising more than $45 billion. But the SPAC boom is catching the interest of European investors. Amsterdam has emerged as a hub, although the numbers remain far smaller than in the US.
Mustier and former Bank of America banker Diego De Giorgi will be the operating partners of the SPAC, which will be called Pegasus Europe and list in Amsterdam, according to the Financial Times.
Tikehau Capital and Arnault’s Financière Agache holding company will be strategic and financial sponsors. A statement released by Tikehau said they will “bring meaningful resources and support to the company.”
Arnault – who owns brands including Christian Dior, Louis Vuitton and Givenchy – is the latest in a long line of big-name SPAC sponsors. Hedge fund boss Bill Ackman floated a $4 billion SPAC last year, while former Credit Suisse boss Tidjane Thiam has one in the pipeline.
Basket player Shaquille O’Neal and quarterback and campaigner Colin Kaepernick are among the celebrities to have backed SPACs.
Ex-Commerzbank boss Martin Blessing is reportedly planning to list a shell company in Amsterdam.
“There is in Europe a need for growth capital,” Mustier told Bloomberg TV on Monday. He said the sponsors “share the same vision, to bring capital to companies in Europe. And we chose, naturally, the financial sector to do that.”
The four sponsors plan to buy at least 10% of the SPAC’s shares at IPO, Tikehau said, and to commit to a “substantial forward purchase agreement.”
SPAC NextGen Acquisition Corp. jumped as much as 40% on Monday before paring gains after a Reuters report suggested the company is in talks to take the EV truck-maker Xos Trucks public.
According to Reuters sources, the special purpose acquisition company is in discussions with investors about raising financing for the deal and an agreement could be announced as earlier as this month.
Insider’s request for comment from Xos and NextGen went unanswered, and the companies declined Reuters’ request from comment.
NextGen was formed by ex-Goldman Sachs banker George Mattson and ex-Carlyle Group chairman Gregory Summe, who raised $375 million in an IPO back in November. The company has been looking for a partner to take public ever since, and with EVs booming, Xos is a solid option.
Xos, previously known as Thor, creates state-of-the-art electric commercial vehicles that focus on reducing operating costs for clients. It boasts its own operating system and customers like UPS and the cash handling company Loomis, among others.
The reported deal between NextGen and Xos takes advantage of two of the most popular trends in the markets today: SPACs and EVs.
A special purpose acquisition company, or SPAC, is a ‘blank-check’ firm that doesn’t have any business operations of its own. Rather, SPACs goal is to merge with private companies using funds from their initial public offerings (IPOs). This allows the private company to skip the burdensome regulatory procedures that can slow a public offering.
In the past, SPACs were a rare phenomenon not usually seen in the markets, however last year saw a boom in SPAC offerings. In fact, 219 SPACs raised $73 billion in proceeds in 2020, representing a year-over-year jump of 462% which outpaced traditional IPOs by $6 billion.
Xos competitor Proterra also announced it has a SPAC deal in the works with Chamath Palihapitiya’s ArcLight Transition Corp. last month. That deal valued the newly combined entity at $1.6 billion.
Former baseball superstar Alex Rodriguez is the latest high-profile name to throw his hat in the SPAC ring, with a launch of his own “blank-check” company called Slam Corp, according to a SEC filing.
SPACs are investment vehicles that raise funds from investors which are then used to acquire a private company and bring it public.
Rodriguez will lead the Slam Corp. SPAC as its CEO, and is seeking an acquisition within the sports, media, entertainment, health and wellness and consumer technology sectors.
“We will seek to acquire a multibillion-dollar asset with a leading market position in an attractive industry,” Slam said in the filing.
According to the filing, Slam Corp is seeking to raise up to $575 million with the sale of stock and warrants at $10 per share.
SPACs have been all the rage since last year as the COVID-19 pandemic upended the traditional IPO roadshow offering. According to data from SPACInsider, 248 blank check companies raised $83 billion in 2020. So far in 2021, 118 SPACs have raised $35 billion.
Also – we’re hiring another reporter for the team! Are you a journalist looking to dig deep on digital health, break news, and make sense of what’s ahead for the industry? Be sure to apply here!
A pharmacist fills a syringe to prepare a dose of the Pfizer-BioNTech Covid-19 vaccine for front-line health care workers at a vaccination site at Torrance Memorial Medical Center on December 19, 2020 in Torrance, California.
The results – while not as high as Pfizer and Moderna’s – come with some big questions. For one, having only one dose could be a game-changer. J&J shared that its vaccine was 85% effective at preventing severe disease, across all variants, which would be a big help in curbing the pandemic.
At a mass vaccination site set up in a California Six Flags, a nurse administers the COVID vaccine. The state has delivered 45% of its allotted vaccines, compared to North Dakota’s 84% and South Dakota’s 75%.
For states and cities with bigger populations, she found there are two big takeaways from North Dakota and South Dakota’s experiences. Collaboration is key, and so is keeping the rollout system centralized.
It’s a move most Wall Street analysts are cheering on, saying Walgreens “nailed” the choice for a successor to Stefano Pessina who will stay on as executive chairman.
Shelby Livingston has a full look at what analysts think is ahead for the company with the pick.
Last Friday, Shelby had a chat with Humana CEO Bruce Broussard.
Broussard told her about competing with some of the health-insurance startups taking on the red-hot Medicare Advantage market, like Oscar and Devoted.
Humana for its part has its own answer: a new venture called Author. It launched in 2021 in South Carolina, and already has 15,000 members, Broussard told Shelby.
Speaking of the insurance upstarts, Shelby and the graphics team here at Insider took a closer look at Medicare Advantage enrollment heading into 2021.
(It’s pretty striking to see the enrollment numbers for giants like UnitedHealthcare stacked next to some of the tiny younger players.)
As part of Shelby’s conversation with Broussard, they discussed what led Humana to invest heavily in primary care. The conversation turned into one about the future of health insurers, medicine, and Humana itself.
Tech giants are keeping busy, as Blake Dodge has been reporting over the past few weeks.
That’s especially the case for companies as part of the Alphabet umbrella. She and Alphabet reporter Hugh Langley teamed up over the past week on some dispatches from Google’s parent company.
With that all in mind, I wanted to let you know about an event Megan is moderating on February 10 at 3 p.m. ET. She’ll be talking to top healthcare VCs about the year ahead for startups trying to make a dent in the $3.8 trillion healthcare industry.
The office-sharing company, which tried but ultimately failed in its attempt to go public at a valuation of around $48 billion in 2019, is in talks to combine with a SPAC, the report said, citing people familiar with the matter.
A deal could value WeWork at $10 billion, which would be a dramatic fall from its peak valuation of $47 billion in 2019 when SoftBank led a funding round.
SoftBank remains a majority owner of WeWork, and the Japanese conglomerate marked down its valuation for the company to $2.9 billion amid the COVID-19 pandemic last Spring.
While SoftBank has been weighing offers from a SPAC affiliated with Bow Capital Management LLC, it has also received separate offers for a new private investment round that it is considering, according to the report.
Proceeds raised from either potential deal would be used to fund growth initiatives, the report said.
There is no guarantee that WeWork will strike any deal, and the talks are complicated, the people said.
The company has been working to clean up its image after extravagant spending by its former CEO and co-founder Adam Neumann tanked its planned public debut more than a year ago.
SPACs have been all the rage over the past year as companies look for a faster and cheaper route to go public relative to the traditional IPO. Nearly $75 billion was raised by 219 SPAC IPOs in 2020, and 2021 has been off to a strong start as well, with more than 80 SPAC debuts so far this month, according to data from SPACInsider.
The deal will value EVgo at $2.6 billion and raise up to $575 million in proceeds for the firm, which will allow the company to accelerate the expansion of its electric-vehicle charging network.
The EVgo merger touches on two hot trends seen in the stock market in recent months: the proliferation of going public via a SPAC instead of the traditional IPO route, and giving investors exposure to the fast-growing electric vehicle space.
Through a strategic relationship with General Motors, EVgo expects to add more than 2,700 fast chargers to its network over the next five years. The company also has corporate partners that include Uber and Lyft, and EVgo has worked with Tesla to enable native fast charging on its EVgo network.
David Crane, the CEO of Climate Change Crisis Real Impact I SPAC, said of EVgo: “It has a distinct and highly advantageous owner-operator business model, supported by strategic partnerships with key industry players singularly focused on an essential and growing factor necessary for supporting widespread EV adoption.”
He added: “EVgo’s comprehensive national DC fast charging network capable of charging every type of electric vehicle is unparalleled, and we are proud to be a part of its ongoing success.”
The proposed merger has been approved by the board of directors of both companies, and completion of the transaction is expected to occur in the second quarter of 2021.
Chamath Palihapitiya said Tuesday that his “biggest investment in climate change” is in commercial EV manufacturer Proterra, which is set to merge with blank-check firm ArcLight Clean Transition Corp.
Palihapitiya noted Proterra’s first-mover advantage, revenue growth, and a runway of orders and backlogs as part of his reasoning for the investment.
“This transaction enables Proterra to take the next step towards our mission of advancing EV technology to deliver the world’s best performing commercial vehicles,” said Jack Allen, Chairman and CEO of Proterra.
“Blank-check” ArcLight Clean Transition Corp. is set to merge with commercial electric vehicle company Proterra in what Chamath Palihapitiya calls his “biggest investment in climate change.”
On Tuesday, Palihapitiya announced via Twitter that the special purpose acquisition company ArcLight Clean Transition Corp. will merge with Proterra, taking the clean-tech commercial EV leader public.
Palihapitiya lead a round of $415 million in private investment in public equity (PIPE) in Proterra, with the likes of Daimler Trucks, Franklin Templeton, Fidelity Management & Research Company LLC, as well as funds managed by BlackRock tagging along.
The SPAC will provide resources, including $825 million in cash, to take Proterra’s portfolio of commercial EV tech to new levels of growth on the open market. The transaction represents an enterprise value of $1.6 billion for Proterra.
Jack Allen, Chairman and CEO of Proterra, said of the move: “This transaction enables Proterra to take the next step towards our mission of advancing EV technology to deliver the world’s best performing commercial vehicles. In addition, it introduces a partner in ArcLight that has a shared focus on sustainability and renewable energy.”
Proterra is North America’s number one EV bus original equipment manufacturer, boasting over a decade of experience in the industry. The Burlingame, California-based firm also develops world-class electric charging systems.
Palihapitiya gave a one-page investment thesis breakdown on Twitter that included some of his reasoning behind the Proterra move. However, based on the investor’s recent public comments, one of the main drivers of his investment may be putting his money where his mouth is in terms of backing clean tech initiatives.
Palihapitiya, an avid supporter of green policies, appeared on CNBC last week and argued the “world’s richest person should be somebody that’s fighting climate change.”
However, the merger is also a good fit for ArcLight Clean Transition Corp’s main goal, according to Jake Erhard, President, CEO and Director of ArcLight.
“We launched ArcLight Clean Transition with a clear goal of identifying and partnering with mission-driven companies with differentiated technology, compelling growth opportunities and a proven ability to execute,” Erhard said.
“With a portfolio of leading-edge products, a substantial first-mover advantage over its competitors and a demonstrated ability to scale, Proterra perfectly fits these criteria. We look forward to working closely with the Proterra team to execute its strategic priorities and deliver shareholder value.”
Chamath Palihapitiya went even further, elaborating both qualitative and quantitative points about the validity of Proterra’s commercial EV business in his Tuesday Twitter post.
<blockquote class=”twitter-tweet”><p lang=”en” dir=”ltr”>I just made my biggest investment in climate change.<a href=”https://twitter.com/search?q=%24ACTC&src=ctag&ref_src=twsrc%5Etfw”>$ACTC</a> is merging with <a href=”https://twitter.com/Proterra_Inc?ref_src=twsrc%5Etfw”>@Proterra_Inc</a> to help take it public. I led the $415M PIPE.<a href=”https://twitter.com/Proterra_Inc?ref_src=twsrc%5Etfw”>@Proterra_Inc</a> is NA’s #1 EV bus OEM. The company’s technology, their lead and their revenues made this a no brainer for me. 1-pager attached. <a href=”https://t.co/Lv1Q6zkQwj”>pic.twitter.com/Lv1Q6zkQwj</a></p>— Chamath Palihapitiya (@chamath) <a href=”https://twitter.com/chamath/status/1349003706520522753?ref_src=twsrc%5Etfw”>January 12, 2021</a></blockquote> <script async src=”https://platform.twitter.com/widgets.js” charset=”utf-8″></script>
First, he argued Americans are increasingly using public transport, taking over 9.9 billion trips in 2019 alone.
Palihapitiya also noted Proterra’s first-mover advantage. The company has sold over 1,000 commercial electric vehicles in North America, representing over 50% market share for the burgeoning industry.
Finally, he mentioned the significant decline in EV battery costs since 2010 (over 85%), Proterra’s impressive compound annual growth rate of 68%, and the $750 million in current orders and backlogs at Proterra as drivers of his “biggest investment in climate change.”
Shares of ArcLight Clean Transition Corp. are up over 75% on the news, taking the SPAC to a market cap of close to $750 million.
Shares of Churchill Capital Corp. IV are up over 50% in a two-day streak to start the week.
News of the SPAC potentially taking EV company Lucid Motors public is driving the share price higher.
The fourth of seven ‘blank-check’ companies operated by Michael Klein, Churchill Capital Corp. IV’s plan for Lucid Motors would keep the SPAC craze going in 2021.
Shares of Churchill Capital Corp IV soared to start the week on news the special purpose acquisition company is in talks to take Lucid Motors public, per Bloomberg.
Churchill Capital Corp IV is operated by veteran Wall Street dealmaker Michael Klein, and is the fourth of seven ‘blank-check’ companies which Klein has been using to take partner companies public.
In this case, the partner firm is Lucid Motors, a relatively well-established EV manufacturer based out of Newark, California, and which targets the luxury end of the car market. The deal could potentially value Lucid at $15 billion, according to Bloomberg.
Lucid is yet another competitor in an increasingly crowded EV space. However, the company has a little more going for them than many of its competitors.
Lucid boasts world-class EV tech and is owned in part by the Public Investment Fund of Saudi Arabia after a 2019 funding round valued at over $1 billion.
Starting at $77,400 ,the Air features a 9.9 second quarter-mile and fast-charging that captures 300 miles of new EV range in just 20 minutes.
Shares of Churchill Capital Corp IV are trading close to $15 after hovering around the $10 mark for months. The SPAC was the third most traded name among Fidelity customers as of Tuesday morning, behind EV makers Nio and Tesla, according to data from Fidelity.
Chamath Palihapitiya expects Tesla stock to triple and Bitcoin’s price to surge five-fold, he said on CNBC’s “Halftime Report” this week.
The billionaire boss of Social Capital and Virgin Galactic chairman also blasted Facebook, trumpeted SPACs, and explained why he doesn’t expect the current market boom to end in tears.
Here are Palihapitiya’s 15 best quotes from the interview.
The Social Capital CEO and Virgin Galactic chairman also compared Facebook spreading disinformation to selling cigarettes, defended special-purpose acquisition vehicles (SPACs) as another way to take companies public, and argued the current market boom is fundamentally different from the bubble that preceded the 2008 financial crisis.
Here are Palihapitiya’s 15 best quotes from the interview, lightly edited and condensed for clarity:
1. “The world’s richest person should be somebody that’s fixing and figuring out climate change.” – defending Tesla CEO Elon Musk surpassing Amazon CEO Jeff Bezos in net worth this week.
2. “The big disruption that’s coming is to power utilities. There are trillions of dollars of bonds, of capital expenditure, of value sitting inside the energy-generation infrastructure of the world that is gonna go upside down. When that goes pear-shaped, Tesla will double and triple again.” – arguing that Tesla is a clean-energy company that will eventually capture a chunk of the fossil-fuel industry’s value.
3. “I don’t understand why people are so focused on selling things that work. You’re paid to stay with people who know what they’re doing, and this is a guy who has consistently been one of the most important entrepreneurs in the world, so why bet against him? It’s the same thing with Bezos, why bet against him? You get behind these people who have incredibly strong character, who know what they’re doing, who aren’t gonna bend to short-term profits, and who are just gonna drive the train for 10 or 20 years and make the world a better place.” – explaining why he doesn’t plan to sell any Tesla shares.
4. “These guys are dancing, they are in rhythm, they’re in flow. Let them do their thing, get behind them. Don’t sell a share, just let ’em create value.”
5. “It is rocket fuel for assets. Whether those are housing markets, or whether those are capital purchases like cars or vacations, or stocks in this case if we’re still under a lockdown, these things are just gonna go to the moon for a while and so you just have to be long. Everybody who’s trying to understand why you shouldn’t be long, I think is going to regret it for at least the next 18 to 24 months.” – arguing that shrinking consumer credit-card debts, ballooning savings, and a record amount of funds in money markets will drive markets higher.
6. “Building products, cars, energy systems, batteries, retail infrastructure, robots, transforming financial services to be fair for everybody – that’s not trading derivatives and playing gotcha. That was not real value, those people were just shuffling shells around. This time it is different because people are making tangible things you can touch and feel.” – explaining why the current market boom won’t lead to a repeat of the 2008 financial crisis.
7. “There’s a massive inequality gap in the United States. There’s trillions of dollars sitting inside of 401(k)s, they need to be allocated into things that can be fast-growing so that normal ordinary Americans can generate savings for their future retirement, for their homes, for their ability to pay for college. You’re not gonna do that by owning American Express. Those companies are dormant, legacy businesses, that game is over.”
8. “I don’t think it’s peak SPAC. You have to have a simple on-ramp to the public markets, a SPAC represents that. There are really going to be IPOs, initial public offerings, and now IPMs, initial public mergers, and it’s just gonna be the two ways that things are done.”
9. “Look at the amount of money we waste as a country on all kinds of random nonsense. We let politicians run into the Capitol, hang around for 2, 4, 6 years and then just take from the till.”
10. “Can you play the clip in 2012 and 2013 when it was at $200 and everybody was laughing at me on CNBC every time I would talk about Bitcoin? Where is it going? It’s probably going to $100,000, then $150,000, then $200,000.” – Palihapitiya didn’t specify a timeframe, saying it could take five or 10 years for Bitcoin to reach those prices.
11. “We really do need to have some kind of insurance we can keep under our pillow that gives us some access to an uncorrelated hedge. It’s going to eventually transition to something much more important but for right now, the fabric of society is frayed and until we figure out how to make it better, it’s time to just have a little schmuck insurance on the side.” – suggesting that events such as the siege on the Capitol have sapped faith in leaders and institutions, fueling demand for Bitcoin.
12. “It amplifies echo chambers on purpose and by design. If you’re somebody who for whatever reason feels disenfranchised, you can find a corner of the internet where you can amplify your worst fears, and unfortunately 90% of that activity now happens inside of Facebook.”
13. “We optimize for short-term profitability at the sake of our democracy. What we left in tatters was any sense that there was any sort of moral or ethical imperative that would govern decision making at that company. And so that saddens me for the people that work there.” – sharing his feelings as an ex-Facebook employee on the social network’s role in spreading the disinformation that led to protesters storming the Capital.
14. “There are people inside of that company who are building these things that are amplifying the lobotomization, the intellectual cornering of people so that they cannot learn what’s truly happening, so that their worst fears and their worst concerns are amplified. We need to do a better job of understanding that that diet is unhealthy. Now that you sell cigarettes that cause cancer, there need to be labels, they need to be put behind the counter, they need to be far away from the children’s reach.” – arguing that Facebook should be legally treated as a publisher and face tougher regulations.
15. “We just have to have a real ‘come to Jesus’ in this country about what’s truly important.”
Chamath Palihapitiya of Social+Capital Partnership speaks onstage at the TechCrunch Disrupt NY 2013 at The Manhattan Center on April 29, 2013 in New York City. (Photo by Brian Ach/Getty Images for TechCrunch)
Brian Ach/Getty
SoFi is going public via a SPAC backed by billionaire investor Chamath Palihapitiya, according to an announcement made on CNBC on Thursday.
SoFi will be valued at nearly $9 billion and the personal finance company is expected to receive up to $2.4 billion in proceeds from the deal.
SoFi was founded in 2011 and was valued at $4.3 billion in its last private funding round.
SoFi will utilize Palihapitiya’s Social Capital Hedosophia Holdings Corp V to go public. Social Capital Hedosophia Holdings Corp V traded up as much as 50% in Thursday trades.
The deal will value SoFi at nearly $9 billion and provide up to $2.4 billion in proceeds to the company. SoFi last raised $500 million in 2019 at a valuation of $4.3 billion.
SoFi was founded in 2011 and offers a mobile first personal finance service that includes student loan refinancing, investment services, credit cards and insurance.
“SoFi’s innovative, member-first platform has demystified financial services for millions of Americans and simplified the process for those looking to apply for loans, invest their money, obtain insurance and refinance their debt, among many other tasks that were previously arcane and needlessly complicated,” Palihapitiya explained in a press release.
SPACs, or blank check companies, have seen a surge in popularity over the past year as companies utilized the vehicle to quickly go public, sidestepping the traditional IPO route that could be time consuming and costly. Palihapitiya himself has backed a number of successful SPACs including Virgin Galactic and Opendoor.
Palihapitiya said of SoFi, “SoFi’s innovative, member-first platform has demystified financial services for millions of Americans and simplified the process for those looking to apply for loans, invest their money, obtain insurance and refinance their debt, among many other tasks that were previously arcane and needlessly complicated. Additionally, the acceleration of cross-buying by existing SoFi members has created a virtuous cycle of compounding growth, diversified revenue and high profitability.
