While investors have certainly cooled on the idea of special purpose acquisition companies (SPACs), famous hedge funder Bill Ackman is betting they may be open to his spin on the investment vehicle. 🧠
A SPARC is a special purpose acquisition rights company, which operates like a SPAC, acting as a shell to combine with a private company and take it public. However, with a SPARC, investors will know what company the financing vehicle would be used to merge with before they pledge their investments.
Essentially, it provides an extra layer of protection for investors because they can choose not to invest if they don’t like the vehicle’s target company. Whereas with a traditional SPAC, they put the money in, essentially betting on the fund manager and their ability to pick a good target. They may have some idea what they plan to invest in, but not always. 🎯
Now, Bill Ackman starting a SPARC isn’t that exciting of a news story. But where it got interesting is that the billionaire investor signaled that he would “absolutely” do a deal with the social media platform X, previously known as Twitter. However, he hasn’t talked to Elon Musk about the investment yet; he’s just saying he’d be open to it.
Bringing the company back to the public markets in its much leaner, more chaotic form a year after Musk’s acquisition officially closed would be an exciting twist. 🍿
For now, investors will have to wait patiently as Ackman vets his targets. In the meantime, we can all enjoy watching Bill respond to investor pitches in the comments of his tweet. 😆
Pershing Square SPARC Holdings, Ltd.
If your large private growth company wants to go public without the risks and expenses of a typical IPO, with Pershing Square as your anchor shareholder, please call me. We promise a quick yes or no. https://t.co/6YXVZm9EgQ
— Bill Ackman (@BillAckman) September 29, 2023