SUSPICIOUS SPACS
MORE THAN 180 SPACS ARE NOW RACING THE CLOCK TO FIND MERGER PARTNERS. BELOW ARE SOME OF THE MORE DUBIOUS DEALS.
SPAC: Orisun Acquisition IPO FUNDING : $700 million MERGER PARTNER: Ucommune VALUATION: $769 million
PROBLEM: Red flag. The “Chinese WeWork,” with 211 office locations in mainland China and Singapore, is going the SPAC route after underwriters Citigroup and Credit Suisse abandoned a traditional IPO effort, citing an unrealistic IPO valuation for the money-losing company.
SPAC: Landcadia Holdings II IPO FUNDING: $300 million MERGER PARTNER: Golden Nugget Online Gaming VALUATION: $745 million
PROBLEM: Blatant conflicts of interest. Debt-laden Tillman Fertitta is selling his Golden Nugget Online Gaming operation to his own SPAC (his second). When the dust settles he will own 11% of the new company and his debt load will be reduced by $150 million. (Despite this, and a dismal performance on his first SPAC, Fertitta raised $500 million in Landcadia Holdings III in October.)
SPAC: Mountain Crest Acquisition IPO FUNDING: $50 million MERGER PARTNER: Playboy Enterprises VALUATION: $381 million
PROBLEM: Debt. Three years after the death of founder Hugh Hefner, the once iconic nudie-magazine company is being resuscitated with a focus on “sexual wellness”— think hair-loss treatments and erectile dysfunction pills— and more bunny-ear licensing. Buzzkill: perennial losses and heavy debt.
SPAC: Forum Merger II IPO FUNDING: $200 million MERGER PARTNER: Ittella International VALUATION: $482 million
PROBLEM: Hype. Shares doubled to $20 as day traders and Robinhood speculators flocked to the maker of Tattooed Chef frozen vegan and gluten-free meals. Retail ownership is so high that the SPAC had difficulty finding enough voters to approve its merger—bullish holders used Twitter, Reddit and message boards to solicit votes during a month-long delay.
SPAC: HL Acquisition IPO FUNDING: $55 million MERGER PARTNER: Fusion Fuel VALUATION: $96.7 million
PROBLEM: Wallflower. A merger with a Singaporean hydrocarbon logistics company fell apart in March. In June, the SPAC committed to Fusion Fuel, a Portuguese company that claims it has “proprietary” technologies to produce emissions-free renewable hydrogen. Yet as time runs out, its merger vote has already been extended twice.