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Technology Stocks : Blank Check IPOs (SPACS) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (1600)	2/12/2008 9:55:38 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 3862

Lets hope all the SPACs at least invest their cash in trust wisely, read, dont gamble with it: Here is a new victim. It lost because it is unable to sell their "investments": Message 24305335

To: Glenn Petersen who wrote (1600)	2/12/2008 10:29:46 AM
From: jrhana	Respond to of 3862

Special Purpose Acquisition Companies (SPACs): How Much Influence Will They Have in 2008? seekingalpha.com February 11, 2008 Earlier this month the New York Times ran a piece called: "The Unseen Mergers Boom: SPACs," which I felt was intriguing, and worth bringing to my readers' attention. These blind investment vehicles have accumulated a war chest and through their acquisitions, will influence the market in 2008. SPACs are companies organized to purchase one or more operating businesses. The equity funds to acquire these businesses come from their initial public offering. Think private equity for the masses. According to SPAC Analytics, in 2007 SPACs raised approximately $12 billion in proceeds in sixty six initial public offerings. Fifty five SPACs are already in the pipeline to sell shares to the public, according to one recent report. Even in today’s troubled climates these companies should sustain a steady flow of private M&A activity in the next year. It won’t quite match the private equity boom but a nice chunk of business in troubled times. In 2007, approximately 23 percent of the total number of U.S. initial public offerings and 18 percent of the money raised were SPAC related. If the current figures hold 2008 will be even better. My question is who is buying into these deals, and an even bigger question is, why? SPACs have a distasteful reputation due to a number of scandals associated with them in the 1980s. Initially, when they first reappeared on the scene the major banks and M&A law firms refused to represent them. Morgan Joseph and Ladenburg Thalmann did the hard work of establishing a market. Demand however brings respectability. Citigroup recently underwrote the largest SPAC IPO ever by Liberty Acquisition Holdings, a $1.035 billion initial public offering with Cleary Gottlieb as underwriters counsel. The New York Stock Exchange and Nasdaq still refuse to list SPACs, giving this burgeoning market all to the American Stock Exchange, but don’t expect their forbearance to last if the SPAC trend continues. Although larger banks, and more prestigious law firms are garnering the fees as the industry grows, that doesn’t make the deals smell better. A purchase of SPAC securities is typically an investment in a single, to-be-determined acquisition. At the time of his or her purchase, a public investor is uncertain what business or industry the SPAC will enter, the size of the SPAC’s acquisition and the leverage it will bear, and whether the SPAC’s management will have any facility in the industry of the investment. Their influence on these matters is instead limited to a vote on the acquisition. There are many naysayers that point out that if an investor doesn’t approve the acquisition the cash returned to them is less than they put in. This is well disclosed, and relatively obvious. Salaries need to be paid during the hunt, and the lights have to be on. Because SPACs are public vehicles, and their acquisition targets often are not, there are traders who can profit from the inherent inefficiency of this structure. A SPAC acquisition is also an arbitrageur’s dream. The approval of the transaction often occurs several months after announcement. The proxy statement to approve the transaction, which includes the relevant financial and other information is not immediately filed after announcement yet investors can trade the SPAC shares in the interim in anticipation of the acquisition thereby sidestepping the gun jumping provisions normally imposed on I.P.O.’s. This creates short term trading opportunities for arbs to take advantage of information deficits. Additionally, there is a gun to the head of management at the SPAC to make an acquisition swiftly. This seems to make sense, as once the investors have their money in, action is required. Market conditions and knowledge of a SPAC's timeline requirements can help create bad outcomes. The typical requirement that a SPAC consummate an acquisition within 18 months creates additional distortions in bargaining incentives as SPAC managers face pressure to complete an acquisition within this timetable. Investment bankers need the work. Investors seem to have an appetite for the investments. For now this seems like another acquisition vehicle that will impact the markets in 2008. The fallout or success of SPACs will probably not be felt in 2008, but the money they pump into the market may have a positive influence. Hopefully this is not another bubble builder with heavily paid consequences for investors in years to come. Andrew Corn

To: Glenn Petersen who wrote (1600)	2/12/2008 3:05:26 PM
From: thwerth	Read Replies (2) \| Respond to of 3862

Marathon Will Share with Investment Bankers - Glenn, I don't think thats necessarily a bad thing. I was concerned he's not out their busting his but. I would assume with all this publicity out there, some hungry investment bankers (with "fat" fee offerings) will move quickly trying to get something together. We all know how quiet the LBO business is these days and with 300 million + in the kitty and $5 Million of his personal money you'd think something will get on the board. However these are unusual times and maybe sellers out there are holding on to last years prices and aren't stepping up to the table ?