After its failed 2019 Initial Public Offering (“IPO”) attempts, WeWork announced, on March 26, 2021, it has agreed to go public with a special purpose acquisition company (“SPAC”). (Reuters Staff, Reuters). This past year, SPACs have become the hottest trend in finance. (Tom Huddleston Jr., CNBC). According to a PricewaterhouseCoopers analysis, roughly 230 SPACs went public in 2020, raising about $71 billion in funding, a new record for SPACs in a single year. (PricewaterhouseCoopers). The number of SPACs that have gone public in 2021 is more than the annual total for IPOs in past years for both traditional IPOs and SPACs combined. (Rani Molla, Vox). Companies like DraftKings, Nikola Motor Co., Opendoor, and Virgin Galactic have all used the popular method of taking companies public through SPACs. (Tom Huddleston Jr., CNBC). SPAC mania is still booming, and WeWork is just one of many newbies on the expanding list of companies targeted by SPACs. Id.
Read MoreYou may have heard of an initial public offering (“IPO”), but what about a special purpose acquisition company (“SPAC”)? Once viewed as a “sketchy Wall Street arcana,” a SPAC is a publicly traded shell company created for the sole purpose of merging with or acquiring a private company so the target company can forgo much of the traditional IPO paperwork. (Heather Perlberg, Bloomberg; Julie Young, Investopedia; Camila Domonoski, NPR). In recent years, SPACs have increased in popularity to the extent many famous individuals, such as baseball legend Alex Rodriguez, professional-basketball-superstar-turned-DJ Shaquille O’Neal, and former House of Representatives Speaker Paul Ryan, are now creating them. (Heather Perlberg, Bloomberg). In 2020, U.S. SPACs raised $83.3 billion, up from $13.6 million in 2019. Id. This year, SPACs have already generated $73 billion and make up around 70% of the IPO market. Id. How did SPACs become so popular and how do they work?
Read MoreHong Kong recently announced the plan for its own blank check listing framework with hopes for deals to begin by the end of this year. A special purpose acquisition company (“SPAC”) —another name for blank check companies— is a listed shell company created with the purpose of raising money through an Initial Public Offering (“IPO”) to then acquire a promising private company, in effect taking the company public without a traditional IPO. A SPAC is often referred to as a blank check company because when a SPAC raises money, the individuals buying shares during the IPO have no idea who the future target company will be.
Read MoreVanguard Group, Inc. and BlackRock, two of the world’s largest asset managers, joined the Net Zero Asset Managers Initiative pledging to support efforts to limit global warming to 1.5 degrees Celsius and accomplish net zero greenhouse gas emissions by 2050, as called for in The Paris Agreement. (Alastair Marsh, Bloomberg Law).
Read MoreOver the past year, Big Pharma proved what the industry can achieve when it works together. Major pharmaceutical companies have set aside their differences to produce the Covid-19 vaccine. Instead of competing over disease treatments and high dollar medications, pharma players turned from foe to friends during the pandemic. Up and down the supply chain, big names in the pharma industry are teaming up to meet Covid-19 vaccine production demands. (Lopez, Bloomberg).
Read MoreNew York City (“NYC”) announced, the week of January 25th, 2021, three of its five public employee pension funds will pull out a collective $4 billion previously invested in fossil fuel companies. (Alex Wittenberg, Bloomberg). According to city officials, this divestment from fossil fuels is not only one of the first in our nation but is expected to be one of the largest environmentally conscious divestment efforts in the world. (Rachel Koning Beals, MarketWatch). The million-dollar question, or better yet, the $4 billion question is: Is it acceptable for custodians of these massive funds to risk losing profits for the beneficiaries of the fund over a moral disagreement with the investment?
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