– Allegations of Jason Ader using investment to settle his debts with his mother’s stake in his firm
– Failed merger between Ader’s SPAC and a Philippine casino company reveals secret agreements and questionable practices of sponsors
The high-stakes playground of billionaires, special purpose acquisition companies (SPACs), and gaming industries has been lit up by a finger-pointing contest. At the center of it all are Jason Ader, a former Wall Street gaming analyst turned activist investor, and Harald McPike, the blackjack player turned secretive billionaire. To add to the intrigue, we have a case of a son reportedly paying off a $16 million debt to his mother. It’s a family affair, folks.
According to allegations by Lim Capital, McPike’s family office, Ader used their investment to settle his debts with mommy dearest. Apparently, Ader’s mother had hired lawyers to dispose of a $16 million stake in her son’s firm, SpringOwl. What a birthday present that must have been.
The entire kerfuffle is rooted in the failed merger of Ader’s SPAC, the 26 Capital Acquisition Corporation, with a Philippine casino company owned by Universal Entertainment. The deal, projected to be worth around $2.6 billion, would have taken the SPAC public in New York. Instead, it seems to have taken Ader on a trip to the courtroom.
Ader, who rose to fame during his 2016 campaign against the US media company Viacom, is not unfamiliar with controversy. On the other hand, McPike started his career counting cards at blackjack tables, and now counts billions in his portfolio as the largest shareholder in London’s Starling Bank. The dispute between these two high-rollers exposes the underbelly of the SPAC boom, a frenzy that made sponsors wealthy but often left investors nursing huge losses.
The case also revealed secret agreements between Mr. Ader and hedge fund manager Alex Eiseman regarding the planned merger with Universal. Eiseman’s involvement was harshly criticized by a Delaware judge as “fundamentally immoral”. The judge’s comments may not have been a ringing endorsement, but Eiseman remains optimistic that the failed merger would have been beneficial to both Universal and 26 Capital Acquisition.
Despite these challenges, Ader has announced his intention to seek damages from Universal on behalf of investors in the now-liquidated Capital 26. Ader’s sale of his shares prior to the crash allowed him to pocket a hefty profit and escape the SPAC ordeal. The outcome of this case could send shockwaves through the SPAC industry and shed further light on the practices and ethics of sponsors.
In the grand scheme of things, this entire fiasco is a stark reminder that no matter how many zeros are on your account statement, the rules of the game are the same. Deception, fraud, and misrepresentation are as unwelcome on Wall Street as they are in a blackjack game. And when you’re dealing with someone else’s money, you’d better play your cards right. In the end, as the dust settles on this high-stakes drama, we can only hope that justice will be served and that the SPAC industry receives the reality check it desperately needs.