Good morning and Happy Monday! This is the scoop for today: 2020 and SPAC, clinical trials hit by ransomware, Airbnb seeks to raise $3 billion in IPO, and the Senate Commerce Committee voted to issue subpoenas to Big Tech.
SPAC Is All the Hype in 2020. But, What Is It, Exactly?
Just like the latest TikTok star, SPAC is having its moment. Let’s have a look at what it is and why more and more companies are going down that route.
What is SPAC?
A special purpose acquisition company (SPAC), also called a blank check company, refers to a company with no actual operations. Instead, it’s formed to raise $$$ through an IPO for the purpose of buying another existing company.
Like a blockbuster movie, a SPAC company’s management is usually packed with high-profile names to gain investor trust.
Why do companies choose to merge with a SPAC?
These are two main reasons:
Much faster – an IPO can take 5-9 months. A deal with a SPAC can be completed in 4-6 months.
Unlike IPO, there’s no uncertain market, excessive scrutiny, and troublesome dealing with underwriters and investors. Instead, negotiations are just between the company and the SPAC.
Why is 2020 the year of SPAC?
So far in 2020, 127 U.S. SPAC IPOs raised $48.7 billion. That’s quite an increase from the 59 SPAC IPOs that raised $13.6 billion in 2019.
Here are some of the bigger names that opted for IPO via SPAC:
Virgin Galactic via Social Capital Hedosophia
DraftKings via Diamond Eagle Acquisition Corp
Nikola via VectorIQ Acquisition Corp
Hyliion via Tortoise Acquisition Corp
Airbnb Aims To Raise $3 Billion In IPO
The hot streak continues! Brace yourself for a red-hot IPO market as Airbnb is set to be one of the largest and most anticipated U.S. stock market listings of 2020.
According to sources, the company plans to make its filing publicly available after the presidential election and is targeting an IPO in December. Of course, the timing is subject to change depending on market conditions. The sources added that the company could achieve a valuation of more than $30 billion in the IPO.
This is quite a dramatic turnaround for Airbnb. Just months ago, the company was valued at only $18 billion and had to secure emergency funding from investors as the pandemic paralyzed the global travel industry.
Airbnb: The revival
Since then, Airbnb has rallied and actually benefited from the pandemic as travelers eschew large hotels for social distancing-friendly vacation rentals. In fact, the company revealed in June that its long-term bookings were actually higher than they were in 2019.
And, in July, the company said that customers had booked more than 1 million nights in a single day for the first time since early March.
The listing is most likely going to go ahead. After all, Airbnb had filed confidentially for an IPO with the U.S. regulators back in August. It’s now only a matter of time.
Ransomware Attack On Health Tech Firm Involved In COVID Trials
In pretty much what is one of the biggest jerk moves in 2020, hackers launched a ransomware attack on a Philadelphia tech company that provides the software used in COVID-19 vaccine trials.
eResearchTechnology was first attacked two weeks ago and employees discovered that they were locked out of their data by ransomware. Some of ERT’s clients that were hit include IQVIA, the research organization helping manage AstraZeneca’s COVID vaccine trial, and Bristol Myers Squibb, the drugmaker involved in developing a quick test for the virus.
ERT has remained hush-hush on how many clinical trials were affected and if it paid the extortionists. But, it did confirm that the company took its systems offline for the day, brought in cybersecurity experts, and notified the FBI.
There’s a bright side here. ERT’s clients — IQVIA, Bristol Myers Squibb, Pfizer, and Johnson & Johnson — have said that the ransomware has limited impacts on their clinical trials.
Senate Commerce Voted to Issue Subpoenas To the CEOs of Big Tech
Drama alert: the Senate Commerce Committee voted unanimously to issue subpoenas to the CEOs of Facebook, Google, and Twitter. And, the CEOs — Mark Zuckerberg, Sundar Pichai, and Jack Dorsey — have agreed to testify virtually. So, you know we’re in for a treat as the policymakers grill some of the most powerful people in the world.
The hearing is set for October 28, six days before the presidential election. Here’s more info on it:
The hearing will revolve around the liability protections afforded to tech platforms under Section 23 of the Communications Act of 1934. Under s.23, websites and tech platforms can’t be held liable for the content their users create. The companies are given full rein to moderate as they see fit.
Republicans have argued that the law unduly protects social media companies against allegations of anti-conservative censorship.
Meanwhile, Democrats have argued that tech platforms have failed to moderate enough content under the law.
All three CEOs agreed to testify a day after the Senate Commerce voted to issue subpoenas.
Curtain coming down? Cineworld Group, the owner of Regal Cinemas, is considering temporarily closing its theaters across the U.S.
Nasa is to launch a new $23 million zero-gravity toilet to the space station. BRB, we need to check if this is the most expensive toilet… ever.
The Philly-based startup, Cocoa Press, is making a 3D printer for chocolate. Um, we’re not sure how to feel about this but, you know, if it ain’t broke…
Bunny is hopping back into the public markets. Playboy is returning to public markets via a merger with SPAC Mountain Crest.
- Even bookmakers can’t handle 2020. Ladbrokes and William Hill, UK bookmakers, stop taking bets on the U.S. election after Trump gets COVID-19.