Josh Black was looking for the next lucrative deal after scoring a 500 per cent profit in a few weeks by investing in US-based electric truck maker Nikola following the announcement of its merger with a blank-cheque acquisition company.
He then invested $23,000 (Dh84,467) in Spartan Energy Acquisition after the special purpose acquisition company (Spac), backed by buyout firm Apollo Global Management, clinched a $2.9 billion deal to merge with electric car maker Fisker.
This time Mr Black wasn't so lucky.
The mechanic from Cherry, Minnesota, in the US, is down more than 10 per cent on his investment after Spartan's stock gave up much of its initial gains following the announcement of the Fisker deal last month.
It's a different story for the big mutual funds, including BlackRock, AllianceBernstein and Federated Hermes Kaufmann, which were invited to finance the Fisker deal – and buy shares in Spartan before it was announced.
Even after the decline in Spartan's stock, they're still up about 25 per cent.
To be sure, retail investors who buy into Spacs before they clinch deals pay the same price as big Wall Street firms. But they have to do this without knowing what the acquisition target will be, taking a leap of faith on a Spac's management team.
The biggest Spac investors are treated differently.
They are told beforehand what the acquisition target is under confidentiality agreements, in exchange for providing financing for the deal in the form of a private investment in public equity, or Pipe, transaction.
While preferential treatment of cornerstone investors is allowed under securities regulations, Wall Street's embrace of what used to be a backwater of the stock market underscores how it is now using its heft to tip the scales in its favour.
Federated Hermes portfolio manager Stephen DeNichilo says retail investors buying shares in Spacs "need to take extra care and do extra due diligence".
Big institutional investors buy huge amounts because they see a good opportunity. They are smart people behind those walls.
He said his firm was given advance information on Spac deals, such as Fisker, because it put in a substantial amount of money as an accredited investor.
"We are taking a greater risk because we are investing earlier on. It takes three months for these transactions to close. A lot can happen in those three months," Mr DeNichilo says.
Spartan, Fisker, and AllianceBernstein did not respond to requests for comment. BlackRock declined to comment.
For retail investor Mr Black, though, it was the announcement that well-known Wall Street firms were backing the Fisker deal to the tune of $500 million that emboldened him to buy Spartan.
"Big institutional investors buy huge amounts because they see a good opportunity. They are smart people behind those walls," he says.
Mr Black says he is now holding on to the stock, hoping it will go up by the time Spartan completes the merger.
As a record number of companies pursue mergers with Spacs as a way of going public that bypasses the traditional initial public offering, Wall Street has obliged.
High-profile financiers such as Bill Ackman and Chamath Palihapitiya have raised billions of dollars for these shell firms through IPOs, with the aim of then combining with real companies in the next couple of years.
Mom-and-pop investors have followed suit, helping to fuel a frenzy for Spac stocks in the wake of their deal announcements.
While some deals, such as those for Nikola, space tourism company Virgin Galactic Holdings and fantasy sports company DraftKings, have proved lucrative, others have left retail investors in the red.
The average Spac underperformed the S&P 500 and Russell 2000 indexes three, six and 12 months after their merger completion, according to Goldman Sachs Group analysts who analysed 56 Spac deals since January 2018.
That is despite the average Spac outperforming the indexes one month and three months following a deal announcement.
"There is some pump-and-dump trading going on with these Spacs," says Rosaria Pellegrino, a bed-and-breakfast owner in Naples, Italy, who is down 30 per cent on her investment in Spacs that did deals with electric truck maker Hyliion and 3D mapping company Velodyne Lidar.
Like Mr Black, she's keeping the stocks for now in the hope of recouping her losses.
As big Wall Street firms pile into Spacs, more and more Pipe deals are being struck with funds providing the bulk of the financing for specific targets. So far this year, Pipe deals with Spacs have totalled $3.1bn, already more than for the whole of 2019, according to Spac Research.
"The fact that investors in size are willing to commit to the transaction and forward underwrite market risk for months serves as a guidepost to the rest of the market and usually results in positive price momentum once the transaction is announced," says Niron Stabinsky, who heads Credit Suisse Group's Spac practice.
Pipe deals have helped push Spac acquisitions in 2020 to a record $27.4bn, including debt, with a further $35.2bn worth of deals announced and pending completion. Spac deals last year came to $24.8bn.
"The greater availability of institutional Pipe capital often enables these deals to get done," says Joel Rubinstein, a partner at law firm White & Case, who leads the firm's Spac practice.
Spacs have raised $22.5bn this year to spend on deals, exceeding the record $13.6bn raised in 2019. There are 104 Spacs, which have raised together $32.4bn, currently chasing deals, according to Spac Research.
"Since Covid-19 came into the US and affected the economy, merging with a Spac allows a company to explain their story a little bit differently to the traditional IPO process," says Douglas Adams, global co-head of equity capital markets at Citigroup.
In many cases, there are no restrictions placed on Wall Street firms on when they can cash out after a Pipe deal with a Spac. Armed with knowledge of what a Spac's acquisition target will be, the big institutional investors also get a chance to grab a big slice of these deals for themselves.
"On a hot IPO, an institutional investor may only get a 2 per cent to 4 per cent allocation of a deal. But in a Spac deal, they get potentially 10 per cent to 20 per cent of the Pipe," says Jeff Mortara, head of US equity capital markets origination at UBS Group.
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
Pari
Produced by: Clean Slate Films (Anushka Sharma, Karnesh Sharma) & KriArj Entertainment
Director: Prosit Roy
Starring: Anushka Sharma, Parambrata Chattopadhyay, Ritabhari Chakraborty, Rajat Kapoor, Mansi Multani
Three stars
Killing of Qassem Suleimani
Killing of Qassem Suleimani
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants
UAE currency: the story behind the money in your pockets
PREMIER LEAGUE FIXTURES
Tuesday (UAE kick-off times)
Leicester City v Brighton (9pm)
Tottenham Hotspur v West Ham United (11.15pm)
Wednesday
Manchester United v Sheffield United (9pm)
Newcastle United v Aston Villa (9pm)
Norwich City v Everton (9pm)
Wolves v Bournemouth (9pm)
Liverpool v Crystal Palace (11.15pm)
Thursday
Burnley v Watford (9pm)
Southampton v Arsenal (9pm)
Chelsea v Manchester City (11.15pm)
The biog
Name: Marie Byrne
Nationality: Irish
Favourite film: The Shawshank Redemption
Book: Seagull by Jonathan Livingston
Life lesson: A person is not old until regret takes the place of their dreams
Virtual banks explained
What is a virtual bank?
The Hong Kong Monetary Authority defines it as a bank that delivers services through the internet or other electronic channels instead of physical branches. That means not only facilitating payments but accepting deposits and making loans, just like traditional ones. Other terms used interchangeably include digital or digital-only banks or neobanks. By contrast, so-called digital wallets or e-wallets such as Apple Pay, PayPal or Google Pay usually serve as intermediaries between a consumer’s traditional account or credit card and a merchant, usually via a smartphone or computer.
What’s the draw in Asia?
Hundreds of millions of people under-served by traditional institutions, for one thing. In China, India and elsewhere, digital wallets such as Alipay, WeChat Pay and Paytm have already become ubiquitous, offering millions of people an easy way to store and spend their money via mobile phone. Indonesia, Vietnam and the Philippines are also among the world’s biggest under-banked countries; together they have almost half a billion people.
Is Hong Kong short of banks?
No, but the city is among the most cash-reliant major economies, leaving room for newcomers to disrupt the entrenched industry. Ant Financial, an Alibaba Group Holding affiliate that runs Alipay and MYBank, and Tencent Holdings, the company behind WeBank and WeChat Pay, are among the owners of the eight ventures licensed to create virtual banks in Hong Kong, with operations expected to start as early as the end of the year.
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
The biog
Favourite car: Ferrari
Likes the colour: Black
Best movie: Avatar
Academic qualifications: Bachelor’s degree in media production from the Higher Colleges of Technology and diploma in production from the New York Film Academy
The biog
Marital status: Separated with two young daughters
Education: Master's degree from American Univeristy of Cairo
Favourite book: That Is How They Defeat Despair by Salwa Aladian
Favourite Motto: Their happiness is your happiness
Goal: For Nefsy to become his legacy long after he is gon
LAST 16 DRAW
Borussia Dortmund v PSG
Real Madrid v Manchester City
Atalanta v Valencia
Atletico Madrid v Liverpool
Chelsea v Bayern Munich
Lyon v Juventus
Tottenham v Leipzig
Napoli v Barcelona
'Spies in Disguise'
Director: Nick Bruno and Troy Quane
Stars: Will Smith, Tom Holland, Karen Gillan and Roshida Jones
Rating: 4 out of 5 stars
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
How to join and use Abu Dhabi’s public libraries
• There are six libraries in Abu Dhabi emirate run by the Department of Culture and Tourism, including one in Al Ain and Al Dhafra.
• Libraries are free to visit and visitors can consult books, use online resources and study there. Most are open from 8am to 8pm on weekdays, closed on Fridays and have variable hours on Saturdays, except for Qasr Al Watan which is open from 10am to 8pm every day.
• In order to borrow books, visitors must join the service by providing a passport photograph, Emirates ID and a refundable deposit of Dh400. Members can borrow five books for three weeks, all of which are renewable up to two times online.
• If users do not wish to pay the fee, they can still use the library’s electronic resources for free by simply registering on the website. Once registered, a username and password is provided, allowing remote access.
• For more information visit the library network's website.
The biog
Full name: Aisha Abdulqader Saeed
Age: 34
Emirate: Dubai
Favourite quote: "No one has ever become poor by giving"
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%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E4.4-litre%2C%20twin-turbo%20V8%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3Eeight-speed%20auto%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E617hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E750Nm%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3Efrom%20Dh630%2C000%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3Enow%3C%2Fp%3E%0A
Red Sparrow
Dir: Francis Lawrence
Starring: Jennifer Lawrence, Joel Egerton, Charlotte Rampling, Jeremy Irons
Three stars
COMPANY%20PROFILE%20
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Company%C2%A0profile
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The specs
Engine: 2.0-litre 4-cyl turbo
Power: 201hp at 5,200rpm
Torque: 320Nm at 1,750-4,000rpm
Transmission: 6-speed auto
Fuel consumption: 8.7L/100km
Price: Dh133,900
On sale: now
UAE tour of the Netherlands
UAE squad: Rohan Mustafa (captain), Shaiman Anwar, Ghulam Shabber, Mohammed Qasim, Rameez Shahzad, Mohammed Usman, Adnan Mufti, Chirag Suri, Ahmed Raza, Imran Haider, Mohammed Naveed, Amjad Javed, Zahoor Khan, Qadeer Ahmed
Fixtures:
Monday, 1st 50-over match
Wednesday, 2nd 50-over match
Thursday, 3rd 50-over match
Story%20behind%20the%20UAE%20flag
%3Cp%3EThe%20UAE%20flag%20was%20first%20unveiled%20on%20December%202%2C%201971%2C%20the%20day%20the%20UAE%20was%20formed.%C2%A0%3C%2Fp%3E%0A%3Cp%3EIt%20was%20designed%20by%20Abdullah%20Mohammed%20Al%20Maainah%2C%2019%2C%20an%20Emirati%20from%20Abu%20Dhabi.%C2%A0%3C%2Fp%3E%0A%3Cp%3EMr%20Al%20Maainah%20said%20in%20an%20interview%20with%20%3Cem%3EThe%20National%3C%2Fem%3E%20in%202011%20he%20chose%20the%20colours%20for%20local%20reasons.%C2%A0%3C%2Fp%3E%0A%3Cp%3EThe%20black%20represents%20the%20oil%20riches%20that%20transformed%20the%20UAE%2C%20green%20stands%20for%20fertility%20and%20the%20red%20and%20white%20colours%20were%20drawn%20from%20those%20found%20in%20existing%20emirate%20flags.%3C%2Fp%3E%0A
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
What are the GCSE grade equivalents?
- Grade 9 = above an A*
- Grade 8 = between grades A* and A
- Grade 7 = grade A
- Grade 6 = just above a grade B
- Grade 5 = between grades B and C
- Grade 4 = grade C
- Grade 3 = between grades D and E
- Grade 2 = between grades E and F
- Grade 1 = between grades F and G
WITHIN%20SAND
%3Cp%3EDirector%3A%20Moe%20Alatawi%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Ra%E2%80%99ed%20Alshammari%2C%20Adwa%20Fahd%2C%20Muhand%20Alsaleh%3C%2Fp%3E%0A%3Cp%3ERating%3A%203%2F5%3C%2Fp%3E%0A
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES
SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities
Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails
Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies
Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
THE SPECS
Engine: 4.4-litre V8
Transmission: eight-speed automatic
Power: 523hp
Torque: 750Nm
Price: Dh469,000
MATCH INFO
Uefa Champions League quarter-final second leg:
Juventus 1 Ajax 2
Ajax advance 3-2 on aggregate
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Company%20profile
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20JustClean%3Cbr%3E%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EDubai%20with%20offices%20in%20other%20GCC%20countries%3Cbr%3E%3Cbr%3E%3Cstrong%3ELaunch%20year%3A%3C%2Fstrong%3E%202016%3Cbr%3E%3Cbr%3E%3Cstrong%3ENumber%20of%20employees%3A%3C%2Fstrong%3E%20160%2B%20with%2021%20nationalities%20in%20eight%20cities%3Cbr%3E%3Cstrong%3E%3Cbr%3ESector%3A%3C%2Fstrong%3E%20online%20laundry%20and%20cleaning%20services%3Cbr%3E%3Cbr%3E%3Cstrong%3EFunding%3A%20%3C%2Fstrong%3E%2430m%20from%20Kuwait-based%20Faith%20Capital%20Holding%20and%20Gulf%20Investment%20Corporation%3C%2Fp%3E%0A
Brief scores:
Kashima Antlers 0
River Plate 4
Zuculini 24', Martinez 73', 90 2', Borre 89' (pen)
More from our neighbourhood series:
'HIJRAH%3A%20IN%20THE%20FOOTSTEPS%20OF%20THE%20PROPHET'
%3Cp%3E%3Cstrong%3EEdited%20by%3A%3C%2Fstrong%3E%20Idries%20Trevathan%3Cbr%3E%3Cstrong%3EPages%3A%3C%2Fstrong%3E%20240%3Cbr%3E%3Cstrong%3EPublisher%3A%3C%2Fstrong%3E%20Hirmer%20Publishers%3Cbr%3E%3Cstrong%3EAvailable%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
The specs: 2019 BMW X4
Price, base / as tested: Dh276,675 / Dh346,800
Engine: 3.0-litre turbocharged in-line six-cylinder
Transmission: Eight-speed automatic
Power: 354hp @ 5,500rpm
Torque: 500Nm @ 1,550rpm
Fuel economy, combined: 9.0L / 100km
KILLING OF QASSEM SULEIMANI
