Brian Snyder/Reuters; Michael Loccisano/Getty Images; Samantha Lee/Insider
Hola, Aaron Weinman here. Let's talk about SPACs.
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1. SPACs are sputtering. More than 10% of companies that merged with SPACs in 2020 and 2021 reckon they'll go bust. Nineteen firms have canceled SPAC mergers this year.
Investors are more discerning over where they park their cash, and regulators are sharpening their pencils on how SPAC targets go public, leading banks to spurn them.
Now, Sarah Pierce, Better's former executive VP for sales and operations, alleged in a lawsuit that Better deceived investors to keep them onboard a merger with Aurora Acquisition, a SPAC sponsored by Novator Capital. (Better said the claims are without merit.)
SeatGeek is another casualty of the downturn. Seatgeek and RedBall, a SPAC led by former Goldman Sachs partner Gerry Cardinale and "Moneyball's" Billy Beane, "mutually agreed" to kill a merger last week due to market conditions. But people on the inside said neither were willing to compromise on a revised company valuation or amend the "sponsor promote."
The "promote" is a lucrative fee for the SPAC sponsor after it seals a merger. Sponsors are reluctant to reduce what they earn on their "promotes," which usually amounts to a fifth of a SPAC's stock, one person said.
With SPACs on the fritz, bankers are fine-tuning their résumés.
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"Layoffs are coming," one banker told Insider. "Pipelines are down. Companies are pushing plans out to 2023."
2. Wall Street's minions are losing power. Since the pandemic hit and bankers retreated home, the junior staff were showered with raises and perks like Pelotons. But the slowdown in dealmaking could reverse some of the juniors' hard-fought victories. Here's how the recent decline has observers spooked.
3. State Street is planning a takeover of Credit Suisse, as first reported by Inside Paradeplatz. The Swiss bank's shares jumped after the report, a reversal of fortunes after warnings of a second-quarter loss. State Street declined to comment on the report, but some analysts say the deal is "highly unlikely."
6. Staying on Goldman, the Wall Street bank lost a chief saleswomen in its asset-management arm, according to Bloomberg. Heather Miner, who earned a partner title in 2018, is joining private-equity shop Advent International.
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