Trump’s SPAC Alchemy, Lloyd Blankfein’s Gap Year, and the Coming Crypto M&A Boom

Donald and Melania Trump
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William D. Cohan
October 31, 2021

Since I began writing my column for Puck, I’ve been inundated with feedback about Wall Street’s biggest characters and concerns. I’ll be engaging with some of those questions here—in addition to a few observations of my own.

DWAC, the blank-check vessel for Donald Trump’s nonexistent media venture, has tumbled from its meme-stock highs to settle at about $70 a share, still more than a 570% return for early investors.  The total windfall for the SPACs obscure financiers could stand at about $440 million, according to the WSJ—what is it about the structure of this SPAC that is so remunerative for its sponsors?

With the notable exception of a SPAC put together by hedge fund manager Bill Ackman—which remains, at $4 billion, the largest SPAC I.P.O. to date and that has yet to be de-SPACed (i.e. that has found a merger partner)—most SPAC sponsors tend toward the greedy side of things. They literally pay pennies on the dollar for the stock they receive as they are setting up the SPAC. Their first windfall comes when the SPAC goes public. Their second windfall comes when they announce a deal to merge with a private company (assuming, of course, that investors react positively to the announced deal).