![]() The target company’s management team will need to focus on being ready to operate as a public company within three to five months of signing a letter of intent.Ī SPAC’s IPO is typically based on an investment thesis focused on a sector and geography, such as the intent to acquire a technology company in North America, or a sponsor’s experience and background. ![]() However, the merger of a SPAC with a target company presents several challenges, including having to meet an accelerated public company readiness timeline as well as complex accounting and financial reporting/registration requirements that may differ based upon the lifecycle of the SPAC involved. SPACs could also potentially lower transaction fees as well as expedite the timeline to become a public company. This approach offers several distinct advantages over a traditional IPO, such as providing companies access to capital, even when market volatility and other conditions limit liquidity. Here we discuss how SPAC mergers work and the related accounting and reporting issues. Subsequently, an operating company can merge with (or be acquired by) the publicly traded SPAC and become a listed company in lieu of executing its own IPO.Ī recent PwC Deals blog explores why companies are joining the SPAC boom, including recent trends and the potential advantages. A SPAC raises capital through an initial public offering (IPO) for the purpose of acquiring an existing operating company. His deep experience and financial expertise as a CFO of several publicly traded life sciences companies will be critical as we further grow our company and global footprint,”Ĥd Pharma shares fell 5.88% to trade at 128p, dropping from Friday’s closing price of 136p.Special purpose acquisition companies (SPACs) have become a preferred way for many experienced management teams and sponsors to take companies public. However, nothing in the markets is guaranteed, and we could get further declines in 4D Pharma’s share price before a rally materialises.ĤD Pharma unveiled John Back as Chief Financial Officer (CFO), a 30-year finance expert who has previously held the CFO position in three publicly listed life sciences companies.ĭuncan Peyton, 4D Pharma’s CEO, said: “John will be an important addition to 4D pharma's management team at such a pivotal time, as the company prepares to close our SPAC merger and begin trading on NASDAQ. ![]() Hence, long-term investors may prefer to wait for the ADS’ to start trading.* Investors are still likely to get the long-awaited rally once 4d Pharma’s ADS’ start trading on the Nasdaq once the merger is completed. Trades who are not familiar with some of the investing cliches such as ‘bulls and bears make money, while pigs get slaughtered’ may find it worthwhile to spend some time familiarising themselves with such cliches that could improve their trading results. However, 4d Pharma’s shares have fallen since Friday after the US Securities and Exchange Commission (SEC) approved the dual-listing of its shares on the Nasdaq via the special purpose acquisition company (SPAC) known as Longevity Acquisition. Investors have been waiting for months for 4d Pharma to complete the dual-listing of its shares on the Nasdaq since October 2020, with many expecting a flood of US investors to lift the company’s share price. The drop in the biotech company’s stock price since Friday’s listing is an excellent example of the classic phenomenon of “buy the rumour, sell the news.” You may have heard this phrase mentioned if you’ve been trading for a while, and this is a real-life demonstration of it. ![]()
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