Special interview
Author: Zhan Yongyu
2021-02-23 09:49
The last update date: 2021-02-23 09:49
U.S. stocks rose sharply last year. In addition to the hot speculation in electric vehicles, online software and pharmaceutical stocks, which are sought after by funds, SPAC (Special Purpose Acquisition Company) has also become the darling of funds.
Last year, the total amount of funds raised by SPAC alone reached US$82 billion (approximately HK$639.6 billion), and the best performing SPAC QuantumScape (QS) has risen 12 times.
Hong Kong Da Ma Sha PCCW (0008) Chairman Li Zekai also rumored the establishment of a third SPAC. Hong Kong people who want to follow Da Ma Sha to eat food must pay attention to these three details!
Although Hong Kong has not yet introduced SPACs, the investment platform Xinfeng Tianyu Group under the helm of the former Financial Secretary Liang Jinsong, and the investment platform Xinfeng Tianyu, was listed in the United States (NFC) as SPAC as early as mid-2018.
In 2019, Xinfeng Tianyu completed the acquisition of the "United Family Health" medical group from existing shareholders such as TPG and Fosun Pharma, bringing the largest comprehensive high-end private medical institution in the Mainland to the United States through Xinfeng Tianyu.
Subsequently, Xinfeng Tianyu was renamed "Xinfeng Medical Group".
After Xinfeng Tianyu Group acquired "United Family Health", it was renamed "Xinfeng Medical Group".
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PCCW (0008) Chairman Li Zekai and PayPal co-founder Peter Thiel have set up two SPACs. One of them is rumored to be interested in acquiring Tokopedia, an Indonesian e-commerce company.
Last Friday (19th) Bloomberg quoted people familiar with the matter as saying that Li Zekai is considering setting up a third SPAC in the United States and plans to raise hundreds of millions of dollars.
The local fund company Argyle Street Management Limited (ASML) also established the SPAC "Malacca Straits Acquisition" last year, aiming to acquire potential media, food processing, renewable energy and healthcare companies for mergers and acquisitions.
With the participation of SPAC companies in Hong Kong's Da Masha, many investors have begun to pay attention to SPAC investments.
One of the characteristics of SPAC is that the investment team cannot find a suitable acquisition target within two years, and will refund the investment cost with a small amount of interest to investors.
If you find an acquisition target with development potential, you can even enjoy a rocket-like rise in stock prices.
Tingluo is an investment that makes a profit without losing money, but is it true?
Rumor has it that Li Zekai is considering setting up a third SPAC in the United States and plans to raise hundreds of millions of dollars.
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Pay attention to position one, the initial investor will make a steady profit without losing
Investors have the right to vote for or against the merger in the final announcement of the SPAC. ASML executive director and Mr. Huang Kekai (Kurkye) who is familiar with SPAC financing revealed that "99.99% of shareholders will support the acquisition, because even if they don’t like the transaction, they can Choosing to get back the investment cost of US$10 and a small amount of interest, there is no need to wait until the SPAC acquisition fails to get back the investment cost."
However, it is worth noting that if it is not an initial investor, but buys shares in the open market, no warrants will be given, and no matter what the price is, they will only get back $10 and meager interest. .
Assuming that shares are bought at $13, if the acquisition fails, there will be a loss of $3, without the time cost.
Investors have the right to vote for or against the merger in the final announcement of the SPAC. ASML executive director Huang Kekai (Kurkye) said that 99.99% of shareholders will support the acquisition.
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Pay attention to position 2. Initial investors exercise warrants to dilute other shareholders' equity
He added that more than 90% of the SPACs on the market now come with warrants, because the investment team usually wants to attract long-term value investors.
These investors usually have the mentality of "beat one shop", so their strategy usually exercises the warrant to exchange shares, and then the stock price rises after the acquisition of Bo.
However, if investors exercise the warrants, they will dilute the equity held by other shareholders.
Huang Kekai pointed out that it is normal for a good "unicorn" company to discuss mergers with 3 or 4 SPCEs at the same time.
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Pay attention to position 3: Nearly two years of dead-line transaction quality varies
According to data from research firm SPAC Research, there are 248 U.S. stock IPOs in 2020 that are SPACs, accounting for as much as 56%. The amount of funds raised will reach US$82 billion (HK$639.6 billion), which is 6 times the high set in 2019.
In the case of non-stop investment in SPAC, Huang Kekai revealed that many high-quality companies have been acquired.
He pointed out that it is normal for a good "unicorn" company to discuss mergers with 3 or 4 SPCEs at the same time.
Since SPAC has a time limit for acquisition, if it fails to find a suitable target company before the deadline for nearly two years, the investment team may lower its requirements to find an acquisition target before the time limit is reached, avoiding delisting "backwater" and affecting its investment reputation.
However, rushing to acquire before the death line has the opportunity to acquire a company of average quality, which will affect the future stock price performance.
SPAC
