The Daily Dish (6/16/21)
Shares of DraftKings fell over 7% after a short position from Hindenburg Research was released. A report from the company revealed that the company’s subsidiary earns half its revenues from illegal gambling markets.
The report goes onto claim that SBTech has extensive operations in illicit gambling markets including China and Iran where the activity is not legal.
The company citied interviews from an unspecified number of former employees, its analysis of the SEC filings and internet infrastructure for evidence in its claims.
The evidence from an Oregon public records shows that subsidiary SBTech operated in Iran for as long as five years and continues to operate in China despite regulations against online gambling.
Hindenburg has focused on short selling companies which have gone public via SPACs including Nikola, Lordstown Motors and Clover Health.
DraftKings criticised the report, claiming that it was written with the incentive to drive down the stock. DraftKings has emerged as an SPAC success story, with shares up over 400% since listing.
Global Consumer Acquisition Corp, an SPAC launched by Private Equity Veterans Rohan Ajila and Gautham Pai, aims to acquire global consumer companies with a significant presence in Asia.
The SPAC raised $170 million was listed in Nasdaq under the symbol “GACQU”. The SPAC is aiming to acquire targets with an enterprise value in the range of $500 million to $1 Billion.
The management at GCAC compliments the expertise in the team’s cross border M&A, business development and the India Expansion.
The team believes that the consumer industry provides significant acquisition opportunities through its global private equity network. The SPAC is aiming to complete a deal within the next 12 months.
Shares of RIDE took a nosedive following the news that the CEO and CFO were resigning.
The sudden exit comes just a week after the company issued a warning about staying in business. During the interim, director Angela Strand has been named as the Executive Chairwoman of the Board.
The market views it as a company specific event with shares falling over 19%, rather than tainting the image of the overall SPAC market. Regardless, the selloff continues the free fall of the once high flying maker of EV trucks.