Today we cover $ASAQ, $BTTX, $CBAH and more…
In today’s Dish, we look at a new offering from Goldman Sachs that could potentially shake up the SPAC Market. Also, SPACs are now targeting… Prison Phone companies? Read on to find the latest on all things SPACs.
Goldman Sachs is looking to introduce a product that would be structured as a two-year bond that pays interest and gives exposure to SPACs, without owning them.
The product could appeal to institutional investors looking at regular income by owning a portfolio of SPACs. The offering, which is being designed by Goldman Sachs’ Global Markets Division, will not charge management fees. Instead, the bank will look to make money by providing financing to potential investors (leverage for additional returns) and through performance-linked stock options (similar to current Goldman SPACs).
Investors can also receive part of the payout based on the performance of the stock at the end of two years and can amplify their returns by borrowing money from Goldman (but will have to pay them back for any losses). The product offering may be perceived as a conflict as Goldman is an investment Bank underwriting the SPAC IPO and advising on the deal (which can work against clients if Goldman solicits investors to redeem SPACs).
SPAC $ASAQ is in talks with prison phone operator Securus Technologies for a potential deal.
Securus, which is currently owned by Platinum Equity (arguably one of their most controversial investments) is still early in its discussions with Atlantic Avenue Acquisition Corp, which is backed by mid-market lender MC Credit Partners. Securus was last valued at $1.6 billion in 2017 when Platinum bought the company from ABRY Partners.
The prison industry has attracted increasing scrutiny for profiting from mass incarceration and immigrant detention, which may lead to regulatory challenges in the future for potential shareholders. Activists have been pressuring private equity funds and pension fund managers to divest their holdings in correctional facilities. Prison phone operators can charge people as much as $25 for a 15-minute phone call, with major proceeds paid back to the facilities as commission.
Securus’ assets were reorganized by Platinum in 2019 under the new corporate umbrella of Aventiv Technologies. This hasn’t stopped regulators from investigating the practices of the business, with Aventiv recently settling a $6 million claim (and agreeing to change business practices) after the Consumer Financial Protection Bureau stated that the company had burdened former detainees with unfair fees to access release money.
Atlus Power has acquired a portfolio of operating energy storage and solar generation assets in Hawaii. The acquired assets serve customers on the islands of Oahu, Maui, and Hawaii, delivering clean electricity to local commercial entities, universities, schools, and municipalities.
ESS Tech is set to continue its run, as shares are up 5% pre-market and could surge further as the stock has a low float of 4.2 million shares.
Trump and Dump
SPACs to Watch this Week
Better Therapeutics, which closed a SPAC merger with Mountain Crest Acquisition Corp, is up more than 80% pre-market.
Shares of Better therapeutics surged after 91.3% of shares outstanding saw a redemption. The stock now has a low float of 1 million shares outstanding with the company’s SEC filings expected Today/Tomorrow.
Other reasons for the run-up include no warrants/options on the stock and a view from the street that the company could do well as it has experienced SPAC Dealmakers (the SPAC bringing the company public is being led by the same team that executed the successful $PLBY deal)
Seaport Global Securities Initiated Coverage on Decarbonisation Plus Acquisition Corp II with a Price Target of $17, implying an upside of 70% from current levels.
Seaport is bullish on $DCRN’s merger with Tritium, as the company is the second-largest provider of DC Fast Charging (DCFC) solutions in Europe and the United States.
Tritium could see tailwinds from government spending as the number of DCFC chargers is forecasted to grow from 78,000 in 2020 to 1.5 million by 2030 and 5 million by 2040. Tritium has a proprietary charger design, which offers a total cost of ownership up to 37% lower than rival DCFC products.