The Biden era IS going to bring us back to the '80s.... with a thumbs-up from the Bo$ton Globe:
"Betting on ‘blank check’ companies; Thimble Point joins growing ranks of so-called SPACs that go public despite owning nothing" by Scott Kirsner Globe Correspondent, February 18, 2021
These are strange days for the stock market. You can take a company public without actually having a business, customers, or revenue, and if you’re Woody Benson, you can do it from the master bathroom of your home in Bonita Bay, Fla., showing slides over Zoom to prospective investors.
The reason is the resurgence of a financial entity called a SPAC, or special purpose acquisition company, sometimes called a “blank check company.” The game plan is to raise money first, go public, and then spend that money (and often more that you raise later) to acquire a promising company that wants to be public but would like to take a shortcut to obtaining its ticker symbol.
It’s the path taken by DraftKings, the fantasy sports gaming company in Boston, and Desktop Metal, a maker of 3-D printers in Burlington. Their stocks have increased in value since they debuted, with DraftKings up more than 200 percent. If you had owned stock in Diamond Eagle, the SPAC entity that eventually acquired DraftKings (which was trading at around $10) or even bought it after the combination happened last April, you’d have enjoyed a pretty good ride: DraftKings trades at around $60 now.
Benson, a longtime Boston tech exec and venture capitalist, put some early money into LogMeIn, now a public software company, and worked at Lotus Development Corp., which helped to popularize e-mail and spreadsheets, in the 1980s. Since 2016, he had been working with Elon Boms, an investor in New Haven, at Launch Capital, which invested in startups on behalf of the Pritzker Vlock Family Office, descendants of the Chicago clan that created the Hyatt Hotel chain, but over the last year, Boms says, Launch Capital had decided to slow the pace at which it invests in startups. It’s not stopping entirely, but the focus is on supporting the companies already in its portfolio. That includes Minibar, which delivers booze on demand via an app, or Cake, a website which provides information on end-of-life decisions (such as how to host a Zoom funeral.)
Let 'em eat Cake, huh?
Boms says he and Benson had noticed that many companies they had backed were having trouble making the jump from private to public; they were so-called middle-market companies, not bigger startups like DoorDash or Airbnb with $1 billion or more in revenue, and acquirers seemed more interested in doing larger deals.
Over the course of 2020, Boms and Benson watched the boom in SPAC activity — including DraftKings, and SPAC entities created by General Catalyst and Highland Capital Partners, two Cambridge venture capital firms. By November, they’d gotten the green light from the Pritzker family to form one of their own, shifting their focus from investing in early-stage companies to creating a public “shell” company and then finding a software or technology company to acquire. They filed paperwork with the Securities and Exchange Commission in mid-December, calling their SPAC Thimble Point Acquisition Corp.
In mid-January, instead of flying around to meet with big investors — a process known as a “road show” — Boms and Benson held those meetings on Zoom. “We had 45 calls over the course of five days,” just after the holidays, Benson recalls.
Because he has four dogs, he felt his master bathroom would be the quietest place to conduct those meetings; Boms was in his home office in New Haven. They began with a commitment from the Pritzker Vlock Family Office, but also raised money from PIMCO, Wellington Management, and others. They’d started with a goal of $200 million; they ended up with $276 million.
Investors, Benson explains, look to SPACs to identify a fast-growing company, acquire it, and deliver a healthy return over time, better than what they could get from other assets. “They’re looking to be long-term holders” of the stock, he says. “This is the exact opposite of day traders.”
Thimble Pointhas two years to identify a company to acquire — or else it returns the money to its investors and goes poof. Paul Bowen of Bowen Advisors, who has been following Thimble Point, says it can raise additional money once it finds a company to acquire......
That's when I gave it the thumb's down.
"Warehouse robotics maker Berkshire Grey plans to go public through SPAC merger" by Anissa Gardizy Globe Staff, February 24, 2021
Bedford-based robotics company Berkshire Grey announced on Wednesday that it plans to go public through the latest investment vehicle popular on Wall Street, which values the company at $2.7 billion.
Berkshire Grey said it will merge with a SPAC, or special purpose acquisition company, called Revolution Acceleration Acquisition Corp., a publicly traded company that exists to raise money and acquire companies that want to go public without going through a traditional initial public offering. When the SPAC deal with Revolution closes, expected in the second quarter, Berkshire Grey said it will have about $507 million in cash and no debt.
This is the second big announcement to go public by a Massachusetts tech company on Wednesday. Watertown-based Markforged, a 3D printing firm, said it would go public through a $2.1 billion SPAC deal.
Berkshire Grey makes artificial intelligence-powered automation systems for warehouses and fulfillment centers, and its customers include retail giants Walmart, Target, and TJ Maxx. One of its anchor technologies is a robotic arm that can identify and pick up a wide range of items.
John Delaney, an entrepreneur and former US representative, and Steve Case, the founder of Internet company AOL, launched their SPAC in December 2020. Delaney, who will remain on the board of directors of the merged operation, said the two were looking for a company that could “benefit from the acceleration of certain important trends in our economy.”
“There may be no trend that is accelerating more than the transition to the digital economy,” he said on a call with investors. “Berkshire Grey is a perfect fit.”
The surge in online ordering during the pandemic has drawn accelerated interest from customers, according to Tom Wagner, the company’s chief executive.
“COVID-19 has only increased the pressures and the need for transformation,” Wagner said on the call. “To enable our connected high speed world today, companies must help their human workers with new automation that enables them to process even more.”
News of the SPAC deal revealed financial information about Berkshire Grey that Wagner had previously been careful to keep under wraps. The presentation released Wednesday noted Berkshire Grey expects to be profitable in 2024, and its revenue projections are lofty.....
Related:
It comes as the state toughened diversity criteria as it looks to sell prime downtown Boston site and as Trump is playing chess.
Don't forget to say your prayers:
"Airbnb revenue beats estimates, showing demand amid COVID surge" by Olivia Carville Bloomberg, February 25, 2021
Airbnb reported revenue in the fourth quarter that blitzed analysts’ estimates, benefiting as people traveled over the holiday season despite rising COVID-19 cases and highlighting how vacation-home rentals are dominating the travel rebound.
Nights and experiences booked, a metric that represents the total number of guest stays and tourist activities booked on the platform, dropped 39 percent from a year earlier to 46.3 million, the San Francisco-based company said in a statement.
The coronavirus pandemic continues to hammer the travel industry after a surge in cases through winter led to new lockdowns and restrictions and the vaccine rollout has faced hurdles globally. Airbnb was among the hardest-hit companies of the pandemic and almost shelved its IPO plans as travel shut down nearly a year ago, but Airbnb, which helped pioneer the home-sharing vacation model, has fared better than its rivals as travelers have taken advantage of work-from-home opportunities, road-tripping to nearby mountain villages or beach towns, often booking longer stays than usual.
Airbnb started to see business stabilize in the fall and the company ended 2020 with a record-setting IPO. It’s stock is up 165 percent since then, valuing the company at more than $100 billion, greater than either Expedia or Booking Holdings Inc.
Airbnb gave a cautious outlook about travel this year. “We have been encouraged by our continued resilience and recovery, and are optimistic about the upcoming travel rebound,” the company said in its report, but, Airbnb said it has “limited visibility for growth” in 2021 “given the difficulty in determining the pace of vaccine rollouts and the related impact on willingness to travel.” Chief executive Brian Chesky has said he is hopeful vaccine distribution will lead to a post-pandemic travel boom that will continue to favor Airbnb over traditional hotels.....
Sorry, can't stay at my house and I will give you three steps to the door.....
"DoorDash beats revenue estimates amid year-end pandemic surge" by Brody Ford Bloomberg, February 25, 2021
DoorDash reported fourth-quarter revenue that beat analysts’ estimates, reflecting a surge in COVID-19 cases and restrictions that fueled demand for food delivery at the end of last year, but its losses also more than doubled from a year earlier.
Sales increased 225 percent in the three months ended Dec. 31 from a year earlier, totaling $970 million, the company said in its first financial report since becoming a public company in December.
DoorDash ended last year with a high-profile initial public offering, raising $3.4 billion. Its shares have gained 66 percent since then, valuing the company at $53 million. They slid 7 percent in extended trading after the results were published.
The big question for investors is whether desire for food delivery will continue in a post-pandemic world, said Ronald Josey, an analyst at JMP Securities. Josey said he anticipates a “big slowdown” in growth in 2021, but is optimistic about long-term prospects.
“We’ve been ordering out now for the better part of a year. I don’t think that goes away,” Josey said.
DoorDash may have a better revenue stream than some of its competitors as COVID-19 restrictions fade in the United States, due to 5 million subscribers to its DashPass delivery subscription service, said Bloomberg Intelligence analyst Matthew Martino. Analysts at Truist Financial called the DashPass a “critical piece of differentiation” from other services.
Uber Technologies Inc., whose Uber Eats is the second-biggest meal delivery service in the United States, has been heavily investing in its delivery segment. The company recently acquired alcohol-focused Drizly Inc. for $1.1 billion and grocery-focused Cornershop. That came on top of the June 2020 acquisition of food-delivery company Postmates Inc. for $2.6 billion. In October, DoorDash teamed up with Sam’s Club to offer same-day prescription delivery.
DoorDash reported adjusted earnings before interest, taxes, depreciation, and amortization of $94 million.....
I'll leave the rest for you to finish.
