Launchpad to Buyback

Welcome to The Rundown! Each week we'll identify and break down for you spacs that are capturing market share and making an impact.

Happy Sunday, Friends!

SPAC activity was muted in the previous week, although a number of De-SPACs faced notable setbacks. Founders of a space launch firm announced plans to take it private at a discount to prevent bankruptcy, while an EV maker settled with the SEC for misleading investors.

Also, a SPAC signed an LOI to take the assets of an investment firm public, and a trading firm made plans to debut through an IPO after scrapping its SPAC deal. Read on to find out the latest about all things SPACs.

De-SPAC News

$ASTR Being Taken Private at Huge Discount to Avoid Bankruptcy

Rocket Launch company Astra announced plans to go private through a low-priced agreement with its founders following a poor performance on the stock market.

Astra's co-founders, CEO chris kemp and CTO Adam London agreed with the board to buy all remaining shares at $0.50/each, with the deal expected to close sometime in the second quarter of this year.

A special board committee, excluding Kemp and London, approved the plan to take the company private. Following a reduction in their bid from $1.50 to $0.50/per share, the committee viewed the deal as the only option besides filing for Chapter 7 bankruptcy.

Astra's current market value is around $13 million, much less than the $2.6 billion valuation it had when it went public via a SPAC three years ago.

Since its stock debut, Astra achieved orbit twice while also suffering three launch failures, pausing its rocket launches in June 2022. Despite buying a spacecraft propulsion company, Astra struggled to generate significant revenue and laid off employees last year to stay afloat.

$RIDE Will Settle With SEC for Misleading Investors

EV Maker, Lordstown Motors, which filed for bankruptcy, has agreed to pay $25.5 million to settle SEC charges for allegedly making false statements about its flagship truck.

The company has faced 11 class action lawsuits since 2021. Lordstown merged with DiamondPeak Holdings in October 2020, valued at over $1.6 billion, but faced SEC scrutiny five months later, leading to a June 2021 warning of a potential shutdown.

The settlement, pending bankruptcy court approval, includes a cease and desist order and considerations for payments to class action lawsuits as part of the disgorgement.

Steve Burns, the founder and former CEO of Lordstown Motors, agreed to buy the bankrupt company's assets for $10 million last fall.

Burns, who established Lordstown in 2018 and took it public via a SPAC in 2020, was ousted in 2021 for significantly overstating the pre-order numbers for the Endurance pickup truck.

Potential SPAC Deals

$JWSM Signs LOI to Take Starwood Capital Assets Public

jaws mustang acquisition has announced plans for a possible merger involving assets of Starwood Capital Group, including hotel properties in Manhattan, Brooklyn, and the UK's De Vere Portfolio.

Under the proposed agreement, the merged company would own interests in 10 properties, including two hotels in New York with a total of 429 guest rooms and suites, and the De Vere Portfolio in the UK, which houses 1,871 guest rooms and suites.

The New York properties offer unique expenses like waterfront views, while the De Vere portfolio covers a range of historic properties across England. The portfolio is estimated to have generated $52 million in net operating income last year and is expected to earn $62 million this year.

Starwood Capital Group is a private investment firm specializing in global real estate, and has raised over $75 billion since 1991, managing about $115 billion in assets.

Jaws Mustang previously raised over $900 million through an initial public offering nearly three years ago, but redemptions have left the SPAC with just over $15 million in cash.

SPAC Deal Updates

$DWAC Scores Legal Win Ahead of Merger Vote

DWAC, set to vote on the Trump Media merger on March 22, announced a Delaware judge rejected ARC Global Investments II's lawsuit request, which could have postponed the deal.

ARC contested the conversion rate for its founder's stake, seeking a larger share in the new company, but the judge agreed with Digital World's former CEO Orlando to put disputed shares in escrow, seeing no need to expedite the case.

Investors are gearing up for the March 22 vote to finalize the long-awaited SPAC merger, first announced in October 2021, which has been delayed by regulatory scrutiny and the challenge of extending deadlines with retail investors.

The SPAC is still contending with another lawsuit, in which Trump Media co-founders Andy Litinsky and Wes Moss allege that Trump aims to reduce their company shares. The pair have suggested that Trump's over $500 million in legal debts could be driving a desperate attempt to secure funds through the merger at their detriment.

eToro Mulls Downsized $3.5 Billion IPO After Scrapping Deal With $FTCV

Israel-based trading platform eToro is targeting a valuation of over $3.5 billion for a potential IPO in New York or London, amid a surge in trading activity reminiscent of the 2021 meme stock frenzy

yoni assia, eToro's founder and CEO, believes a US listing could attract more investors, but the company's strong European and UK business focus, with 70% of its revenue from Europe, may lead to choosing London, potentially boosting London's appeal for ipos.

eToro said it oversees $11.3 billion in customer assets across 3 million accounts. The platform is experiencing increased activity due to rising US and European stock markets and bitcoin prices.

eToro's valuation dropped from $10.4 billion after its SPAC deal fell through in 2022, as CEO Assia noted the market for blank cheque companies had collapsed. Subsequently, the company raised $250 million at a $3.5 billion valuation from ION Group, Social Leverage, SoftBank and Spark Capital.