A Tiger Woods-backed special purpose acquisition company (SPAC) has filed with the SEC to go public via initial public offering (IPO). The company, named Sports & Health Tech Acquisition, is hoping to raise $150 million by offering 15 million units at a price of $10. Each unit will consist of one Class A share and one half of a warrant, exercisable at $11.50.
A warrant represents the right to purchase a company’s stock at a specific price and at a specific date. Should the price of the common stock rise following a successful IPO, these options could be exercised enabling early investors to acquire shares at much less than the share price.
What does Sports & Health Tech Acquisition do?
The business is a SPAC, often known as a “blank-check company.” It acts as a shell company that will actively seek to merge with another firm in order to take it public. This allows the purchased company to avail of capital that has already been raised by the SPAC and also enables avoidance of some of the strict protocols required to go public via IPO.
Sports & Health Tech Acquisition aims to target companies with enterprise value between $600 million and $1 billion initially. It will focus on companies in areas such as sports and social content, health and wellness, and fitness technology.
When can I invest in Sports & Health Tech Acquisition?
No IPO date has been set as of yet, with the company only filing with the SEC late last week. However, the firm plans to list on the NASDAQ exchange under the ticker symbol LDSPU and initial shares will sell for $10.
Sports & Health Tech Acquisition’s Growth Potential
Until the firm selects a target company to merge with it is almost impossible to discuss the value that this SPAC will offer. Choosing the correct company is key in driving future profits. A first deal is expected to be completed within the next 18 months so now it becomes a waiting game.
Having names such as Tiger Woods, former tennis star Caroline Wozniacki, and ex-NBA player David Lee as part of the lead investor group will certainly bring some hype and media interest, but investors need to take care to examine the fundamentals of the company whenever they become available.
It should also be noted that SPACs, despite their rising popularity, still have some underlying issues. Avoiding strict IPO-related vetting, clear advantages to institutional investors, and the propensity for insider information to be used all combine to make investing in any SPAC is a risky proposition. That’s not to say that SPACs are inherently bad, just that more care needs to be taken by investors when choosing to invest their money in these companies.
Financial Writer at MyWallSt
Pádraig’s favorite stock is Nike. Growing up as a sports fanatic, seeing Nike collaborate with athletes like Jordan, Lebron, and Ronaldo inspired him and cemented the brand in his mind. Now, despite having failed miserably in his attempts to earn a fabled Nike sponsorship, he still believes in the innovation and creativity behind Nike and is convinced they will only grow stronger as the world's leading sports brand.