Jeff Smith’s Starboard Value piled into SPACs in the first quarter even as the blank check market began to collapse. The hedge fund manager added at least 30 new SPACs in the first quarter, according to a regulatory filing. Most of these new positions were worth less than $10 million at the end of March. The spate of new SPAC investments came even as the once red-hot market declined significantly. These blank check companies are often speculative stocks with modest earnings, and they’ve taken a hit amid rising interest rates and regulatory crackdowns. SPACs, or special purpose acquisition companies, raise capital in an IPO and use the money to merge with a private company and take it public, usually within two years. The Securities and Exchange Commission introduced a new set of rules for SPACs in March that would represent one of the broadest attempts yet to crack down on blank check companies. The proposed rules would change the safe harbor rules and leave SPACs open to investor lawsuits over overly rosy business prospects. The CNBC SPAC Post Deal Index, which consists of SPACs that have completed their mergers and taken their target companies public, is down more than 40% year-to-date. In July 2021, Smith self-sponsored a $300 million blank check deal. Starboard Value Acquisition Corp. completed its business combination with Cyxtera Technologies, a data center colocation and connectivity services company. The stock is up about 1.2% in 2022. Here are just some of the SPACs Smith added during the first quarter: 10x Capital Venture Acq. III A SPAC I Acquisition Corp. Aetherium Acquisition Corp. Ahren Acquisition Corp. ALSP Orchid Acquisition Corp. Altimeter Growth Corp. 2 Andretti Acquisition Corp. AP Acquisition Corp. Apeiron Capital Invest Corp. corp I Atlantic Coastal Acquisition Corp. Banyan Acquisition Corp. Battery Future Acquisition Beard Energy Transition Acq. Bioplus Acquisition Corp. Blockchain Co-Investors Acq. corp Bullpen Parlay Acquisition Burtech Acquisition Corp. C5 Acquisition Corp. Cactus Acquisition Corp. 1 Capital Works Emerging Markets Acq. Cartica Acquisition Corp. Outside of SPACs, Starboard increased its bet on GoDaddy in the first quarter after acquiring a 6.5% stake in the web services company in December. Smith has remained a prolific activist investor, calling for change at Humana, Kohl’s, Mercury Systems and others. Starboard Value has approximately $6.2 billion in assets under management through the first quarter of 2020, according to filings. Smith spun off the New York-based hedge fund from investment firm Ramius in 2011.
https://www.cnbc.com/2022/05/16/jeff-smiths-starboard-value-piles-into-spacs-even-as-blank-check-market-falls-apart.html Jeff Smith’s Starboard Value Stacks Into SPACs Even As The Blank Check Market Crashes