Even with a mid-year lull, 2021 has been the year of the SPAC.
According to the latest data, almost 500 companies have chosen to go public in the US this year via a SPAC — a public shell company with a big cheque book that buys private companies. SPACs allow would-be public companies to skip the long roadshows, negotiations and some of the due diligence of a traditional IPO process.
This week two big names of interest joined that increasingly long list: WeWork and the Trump Media & Technology Group (TMTG).
WeBack
No company has had a worse traditional IPO experience than WeWork. After filing for an IPO in 2019 controversy after controversy hit the headlines, as investors questioned the company's business model and financial metrics like "community adjusted EBITDA". Founder Adam Neumann got kicked out (with a huge payout). The IPO got canned. Then the pandemic hit.
Given all that happened, it's actually quite remarkable that WeWork is now a public entity of some sort, albeit at a much slimmer $9bn valuation.
Trump Social
The other company of note that merged with a SPAC this week is the Trump Media & Technology Group. TMTG's mission is "to create a rival to the liberal media consortium and fight back against the "Big Tech” companies of Silicon Valley".
Its first focus is likely to be its social network, TRUTH social, but the 22 slides in its investor presentation deck, complete with some 3D charts, reveal some greater ambitions. Those include a streaming platform to rival Netflix and Disney, a news network to take on CNN and potentially a tech product to compete with Amazon Web Services, Google Cloud, Microsoft Azure and Stripe. That's a lot of competition.
