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All Posts Term: SPAC
6 post(s) found

What You Need To Know About Forbes Reverse Merger

What You Need To Know About Forbes Reverse Merger

forbes-924140_1280

The reverse merger of the Forbes magazine with Magnum Opus Acquisition Ltd is the freshest example of media companies catching SPACs. It is a lucrative deal that seeks to allow one of the oldest media publishers, Forbes, to invest further in consumer-focused products while reducing dependence on media revenue. The profit projection resulting from Forbes reverse merger is expected to go high by the end of 2021.

Why is the Reverse Merger Happening?

The next question that anyone is likely to ask themselves is why the merger is necessary. While it will be incorrect to say that the reverse merger does not have any demerits, the truth is that the advantages always outweigh the disadvantages. The typical benefit of a reverse merger that everyone knows is that it saves the private company from the complex and expensive process of becoming a public company. However, that is not all, as many other reasons make private companies choose this path. For instance, it helps in saving the taxes of a private company.

Another benefit of a reverse merger is that it does not negatively impact the competition in the market. It is rare to see the reverse merger on hold because of the negative impact of its implementation. In other words, there is more to celebrate about the merger.

What will the company look like after the Forbes Reverse Merger?

Once the merger between Forbes and Magnum Opus Acquisition Ltd is complete, you do not expect things to remain the same. It is most likely that things will change in one or the other. Although the profits may increase as projected, some disadvantages might come with the entire process. For example, the employees from both sides will be affected. Some may lose their livelihoods, and those lucky enough to survive should expect lots of things. Shifting of roles and confusion among employees is inevitable. Also, the struggle for power among employees may affect the growth and the development of the business. The great news is that this is not likely to last for an extended period before things shape stars to shape up.

Self-Driving Startup Aurora To Go Public In Reverse Merger

Self-Driving Startup Aurora To Go Public In Reverse Merger

AuroraTrucks

Self-driving technology startup Aurora announced that it will go public through a reverse merger transaction with Reinvent Technology Partners Y (Reinvent), a special purpose acquisition company (SPAC), that will provide the company with a cash injection to help continue its development of autonomous truck driving technology and, in the future, for self-driving passenger vehicles as well.

What is a Reverse Merger?

Reverse mergers, and the SPACs that enable them, have become a somewhat controversial method for companies to go public without having to otherwise meet the strict requirements for listing. Going public is not usually an option for companies such as Aurora that do not have a profitable business model in place (and that have not, in fact, made any profits). In addition, this move comes at a time when the overall self-driving car industry is struggling with failed deadlines, still unreliable technology, high cash burn rates, a loss of public trust and the failure of many similar companies. The move to invest more money into self-driving startups either indicates confidence in a forthcoming technological breakthrough or a desperate attempt to keep companies afloat until this major challenge to artificial intelligence applications is overcome, analysts have opined.

Aurora Founders

The Aurora SPAC funded by Reinvent will result in an injection of more than $2 billion into Aurora so that it can continue its (expensive and unprofitable to date) operations for several more years. Reinvent was launched by Reid Hoffman (the co-founder of LinkedIn), Mark Pincus (Zynga founder) and investor Michael Thompson. Other investors include various other Aurora funders as well as other partners including T. Rowe Price and Associates, Sequoia Capital, Uber, Index Ventures, PACCAR and Volvo, among others.

Aurora’s Products and Competitors

If Aurora's plan is successful investors are likely to see huge returns for their backing but the road ahead is risky and uncertain according to industry analysts. The move to focus on self-driving trucks makes sense from a business perspective but other moves, such as autonomous ride-hailing, have been found to be much more difficult to implement with both Uber and Lyft abandoning their efforts. If Aurora manages to deliver its self-driving truck technology it will give it access to a huge and profitable market the income from which could fund their continued research and development to reach their ultimate goal. This is necessary to overcome the accelerating losses the company has experienced with losses of over $214 million in 2020 and $94 million in 2021.

Electric Aircraft Startup Lilium Goes Public In Reverse Merger Deal

Electric Aircraft Startup Lilium Goes Public In Reverse Merger Deal

LiliumJet

German aircraft startup Lilium has announced that it will float on the US stock market through a reverse merger undertaken with Qell Acquisition Corp, a special purpose acquisition company (SPAC), in a deal that will result in a business worth $3.3 billion. Lilium is among a number of aviation companies that are looking to deploy electrically powered planes and take advantage of advances in battery powered technology. Lilium, who have built and tested a five-seater prototype aircraft, aim to compete in the short-haul flight market with a plane that can take off and land vertically and that has achieved speeds of over 100km/h in test flights. The company aims to market its plane to travelers wanting to beat traffic and those making short flights between cities.

Who is Involved with Qell Acquisition

The Qell acquisition company is led by Barry Engle, a former president of General Motors, who has stated that the deal to float Lilium will help achieve the goal of commencing commercial operations by 2024. Daniel Wiegand, the CEO and co-founder of Lilium, has said that Qell is a partner that brings tremendous experience in the mobility business and shares the company's sustainable travel philosophy.

How big is the Reverse Merger?

The total proceeds of the deal are expected to be about $830 million made up of $380 million held in trust and a $450 million private placement. The private placement investors include the fund manager Baillie Gifford as well as investment funds managed by Tencent, Blackrock, Ferrovial, Palantir, Atomico, LGT, FII Institute among other private funds. The transaction implies a value of $2.4 billion for the enterprise which is calculated by multiplying 70% of forecast revenue of $3.3 billion with a forecast of core profits at 3.4 times of $708 million by 2026.

Sportradar Going Public Via A SPAC Deal

Sportradar Going Public Via A SPAC Deal

Lionel Messi (L), Bruno Alves (R)

Sportradar is a sports data firm founded in 2001 based in Switzerland. It is a Multinational Corporation known globally as a leader of sports data and digital content services. Sportradar collects and analyses sports data then distribute the same to the media, bookmakers, sports federations and betting companies. Some of its investors include the NFL and NBA owners Ted Leonsis, Michael Jordan and Mark Cuban.

Sportradar will go public after coming to terms with Todd Boehly-led SPAC on a reverse merger deal. Before getting into the details of the deal, there are few terms that one needs to understand.

What is a Reverse Merger?

A reverse merger occurs when private company mergers with a publicly trading company and operates under its legal shell. The private company takes over the management of the publicly trading company, controls ownership of the stock and even changes its name. For a reverse merger to happen, both companies don't have to be operating in the same industry. In most cases, reverse mergers are considered when the public company begins to fail financially and is left with the legal public corporate shell as its only asset.

What is SPAC

Special Purpose Acquisition Company (SPAC) is a company created to provide capital through an Initial Public Offering (IPO). They do not have any commercial operations. The reason for raising capital is for the acquisition of an existing company. SPACs are given a grace period of two years to finalize an acquisition process, failure to meet the deadline, they must return the raised funds to investors.

Sportradar Going Public

Sportradar, through Horizon Acquisition Corp.11, a SPAC, will go public. The corporation is led by Todd Boehly, Los Angeles Dodgers minority owner. According to Sportico, the deal values Sportradar at $10 billion.
Initially, the company was considering a traditional IPO. If that was to happen, Sportradar IPO would fetch a lesser amount compared to that of the SPAC. The global data company has already signed a letter of intent with Horizon, the Special Purpose Acquisition Company. This becomes an initiating step of the acquisition process.

Paysafe To Go Public In $9 Billion Deal

Paysafe Group Ltd (Paysafe) is an online payments firm that is backed by CVC Capital Partners and Blackstone Group Inc. It has announced that it will be going public through a reverse merger with Foley Trasimene Acquisition Corp, a firm led by billionaire William P. Foley II. Through the special purpose acquisition company (SPAC), it aims to raise $2 billion in a private placement to contribute funds for the transaction valuing the company at about $9 billion when complete. The cash component will be funded by $150 million of Foley's money held in trust.

Paysafe

Bill Foley will become chairman of the merged company's board with the current Paysafe CEO, Philip McHugh, expected to continue in his role. Foley has stated that he wants to position Paysafe as a leading global payments platform and that the deal will accelerate the operational transformation required to achieve that aim.

Biggest Announced Reverse Merger

The Paysafe reverse merger is one of the biggest announced this year and has attracted investors including Third Point LLC, Fidelity National Title Insurance Co, Suvretta Capital Management and Hedospophia among others that will participate in the private placement. The current Paysafe shareholders (consisting of its private equity backers and management) will continue to be the largest shareholders in the merged company.

What Is Paysafe

Paysafe, based in London, offers payment processing services that allow companies to accept payments in a range of ways including cash, credit cards and direct debits online as well as offering prepaid cards and digital wallets. It is unique in that it functions both as a consumer and merchant network whose purpose is to enable businesses and consumers around the globe to perform seamless payment transactions and currently processes some $100 billion annually. It works with payment solution brands including Paysafecard, Income Access, Skrill and Neteller. The company was bought in 2017 by Blackstone Group and CVC Capital Partners in a deal that was worth around $4 billion at the time.

Faraday Futures Announces Public Listing

Faraday Futures Announces Public Listing

FaradayFutures

Faraday Futures is the latest startup to announce a public listing through a reverse merger using a special purpose acquisition company (SPAC) in what is fast becoming a trend for companies in the electrical vehicle space. SPACs have become popular during the pandemic to consolidate funds raised by other financial entities and as a faster means to listing while facing fewer regulatory hurdles.

CEO Carsten Breitfeld

The company's chief executive, Carsten Breitfeld, announced the reverse merger and SPAC vehicle and while he said an announcement would be made 'quite soon' there is as yet no definitive date set for the company going public. Breitfeld, who was previously the co-founder of electric vehicle startup Byton, also declined to offer any details about who Faraday Futures will use to complete the deal.

FF91 Luxury Electric SUV

Faraday Futures is based in California and was founded in 2014 as an electric car maker but has yet to produce a commercially available vehicle. It has announced that its first vehicle that will go into production will be the FF91 - a luxury electric SUV that was presented at CES 2020. Its eye-catching design was apparently met with considerable enthusiasm by attendees. The company aims to raise around $850 million to put this model into production by the end of the first quarter of 2020. This is in addition to the $225 million of bridge financing provided by a group of investors led by Birch Lake Associates.

Faraday Futures Bankruptcy

Investors may be wary of the company's somewhat checkered past; Faraday Future's former CEO and founder, YT Jia, entered Chapter 11 bankruptcy and was forced to sell off his stake in the company to pay debts and to secure the company's future. He is still involved in the company, however, and will be the Chief Product and User Ecosystem Officer. The pandemic has also impacted the company though a $9 million forgivable loan form the US Small Business Administration measure helped it stave off closure and allowed it to keep its employees.

The restructuring of the company is now complete and having Jia's personal financial problems untangled from it may make it a more attractive target for investors in the EV space. Breitfeld also emphasized that the startup's history makes it vital that trust is restored in the brand and that it shows stability as it moves forwards.

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