Can SPACs shake off their bad reputation?

Gabriel Grego was scanning a directory of newly-listed companies when his eyes landed on his next potential : Akazoo, a Greek music streaming service that billed itself as the of emerging markets.

Mr Grego, a hedge fund manager known for his short selling campaigns, remembered Akazoo as a subsidiary of the -listed company called InternetQ. In September 2019, Akazoo re-emerged on the stock exchange through an unusual financial structure known as a special-purpose acquisition company — or SPAC.

Akazoo had merged with a shell company called Modern Media Acquisition Corp. Modern Media had no assets other than $200m in cash that it had raised in an initial public offering: investors had been willing to pay $10 per share in Modern Media because of their confidence in Lew Dickey, a successful entrepreneur in the radio industry who had created the shell.

In early 2019, when Modern Media announced its combination with Akazoo, Mr Dickey called the streaming service “a terrific company” and praised its “patented Sonic AI music recommendation and profiling technology”.


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