The Daily Dish (08/27/21)
The group of lawyers who have filed lawsuits against GO Acquisition, E.Merge Technology Acquisition and Pershing Square Tontine are preparing to target dozens of more SPACs over the coming weeks.
The group, which includes former SEC Commissioner Robert Jackson, law firms Susman Godfrey and Bernstein Litowitz Berger & Grossman, filed lawsuits accusing that SPACs are operating illegally by not registering as investment companies.
Ackman believes that lawsuits against PSTH hold no merit but acknowledged that it would make it harder to complete the deal. There are currently 438 SPACs that have yet to complete a merger, like the ones that have been targeted by lawsuits.
SPACs have traditionally relied on being exempt from registering as investment companies under the investment company act so that they can make investments and sell stocks before the merger.
SPACs typically park their funds in government bonds or money market funds until they find a merger target.
The lawsuits claim that such investments fall outside a SPACs primary function and constitute a breach of the Investment Act. The lawsuit also argues that SPAC sponsors have decided to turn SPACs into extensions of their hedge funds.
In the space of one week, Topps has gone from announcing surging second-quarter earnings and finalising its SPAC merger with Mudrick II to having its flagship MLB partnership cancelled, its merger plans scuttled and its financial rating collapsing.
Credit Rating Agency Moody’s downgraded the company to B2, which is midway on its scale of non-investment-grade debt.
A lower credit rating means increased expenses for future financing. Last week, it was announced that MLB was ending its deal with Topps, which had begun in 1951 and instead partnering with Fanatics.
Mudrick and Topps cancelled the merger after news of the MLB-Fanatics deal.
Yet another SPAC-Fuelled EV Stock is charging into the fray.
Volta Charging, a developer of EV Charging stations, is set to begin trading today after its merger with Tortoise Acquisition, a move that adds to the proliferation of EV stocks on US exchanges. Shares of the company will begin trading on the NYSE under ticker ‘VLTA’.
Volta will join other EV stocks like ChargePoint, EVgo, and Blink Charging in trying to build out charging infrastructure for a growing number of environmentally conscious EV owners.
Analysts believe that the number of US EV charging stations is expected to exceed 1 million locations by 2030 and 2.4 million locations by 2035.