SUBSPAC

The Daily Dish (08/20/21)

PSTH Deal Gets Messy

Bill Ackman is pivoting again in a bid to save Pershing Square Tontine Holdings, which has faced a series of setbacks since it launched last year. In a letter to investors, Ackman proposed a radical rethink that could lead to PSTH shutting down, returning cash to shareholders and being reborn.

Ackman’s SPAC, promoted many investor-friendly features, like tying the sponsor’s pay close to the post-merger performance of the stock. But when PSTH identified a deal that involved a complex transaction that involved buying a minority stake in Universal Music while spinning out two other SPACs, regulators questioned the deal and the plan was scrapped.

This week, PSTH was hit with a lawsuit that challenged the fundamental structure of the SPAC, which prompted Ackman’s letter. Ackman believes that the litigation may deter potential acquisition targets, especially considering that PSTH has only 11 months left to announce a deal.

Ackman proposed replacing PSTH with a new vehicle called SPARC, where investors don’t put up money upfront but receive the right to buy in once the entity announces a merger target. Subject to approval by the SEC and NYSE, investors in PSTH will get their money back at the IPO price of $20 per share and warrants to buy into the SPARC.


Topps SPAC Deal Collapses Amidst MLB Cancelling Partnership 

Topps has decided to mutually terminate its SPAC merger with Mudrick Capital Acquisition Corporation amidst the MLB’s decision to end its 70-year trading card deal with Topps.

MLB is expected to partner with Fanatics for trading cards. Topps had announced its deal in April, with the company being valued at $1.3 Billion.

The company which was founded in 1938 said that it will remain a private company. As per the current agreement with the MLB, Topps will produce licensed baseball products through 2025.

Topps will retain licensing deals with Major League Soccer and the National Hockey League.


SoFi to Settle SEC Charges  

SoFi Wealth, a unit of SoFi Technologies has agreed to pay the SEC $300,000 to settle allegations relating to conflicts of interest over two of its proprietary ETFs.

The SEC sued the company for putting preference on placing client assets into newly created ETFs that were sponsored by its parent rather than third party ETF.

This helped market the SoFi brand as having a broad array of products and services that previously offered. At the time, SoFi Wealth transferred assets of 20,000clients from third party ETFs into its two proprietary ETFs without informing the clients.

To do this, SoFi Wealth used the proceeds of the sale to purchase positions in the SoFi ETFs, which resulted in some tax consequences for many of the clients.


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