Wall Street Strikes Back

The Daily Dish (08/30/21)

Law Firms Fight Back Against SPAC Lawsuits 

Wall Street is banding together to save the SPAC industry, with 49 law firms now pushing back against the allegations that some SPACs are operating as investment companies. SPACs have been a highly sought after client on Wall Street as legal advisers can earn fees from the initial SPAC IPO and subsequent merger with the target company.

The lawsuit, which involves PSTH and two other SPACs, has been bought forward by former SEC member Robert Jackson and professor John Morley, who claim that SPACs have been operating as investment companies and should be registered as such.

Companies under the Investment Act are subject to stringent reporting requirements and strict limits on pay for executives. By contrast, the backers of SPACs stand to make hundreds of millions of dollars from deals.

Several lawyers have expressed concerns that ruling in favour of the Plaintiff would be a huge blow to the SPAC market. Signatories to Friday’s statement include White & Case, Kirkland & Ellis and Weil Gotshal & Manges, the top three legal advisers on SPAC mergers which together have a market share of 37%.

EV Pickup Truck Manufacturer Plans $80 Billion IPO

In an unexpected twist EV maker Rivian, has decided to raise funds through an IPO in a year where EV startups have preferred the SPAC route over IPOs.

Rivian, which is expected to be the first EV manufacturer to launch an electric pickup truck, is seeking a valuation of $80 Billion in its IPO filing.

The company has attracted massive interest from the investment community and has raised around $10 billion over its lifetime. Rivian is backed by Amazon and Ford, with the e-commerce giant owning a 10% stake in the company.

Amazon has already ordered hundreds of thousands of its vehicles to add to its delivery fleet.

Swvl Raises $35.5m Ahead of SPAC Listing 

Dubai based mass transit and shared mobility services provider Swvl raised $35.5 Million in growth financing before its Planned SPAC listing on Nasdaq.

Strategic investors who are part of the PIPE funding have pre-funded a significant portion of the $100 million investment, which in itself is part of the company’s proposed $1.5 billion mergers with Queen’s Gambit Growth Capital.

Investors who are part of the latest funding round include Kuwait’s Agility and Chimera Abu Dhabi. The current funding is expected to accelerate Swvl’s expansion into markets in Europe, Latin America and the Asia Pacific regions.

Investors who have pre-funded the PIPE have received exchange notes of the company, which can be exchanged for shares of the combined company at an exchange price of $8.5 per share once it merges with the SPAC.

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