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Of course it did.
Just about every single late-stage company in private markets at the moment has been contacted by a blank-check company looking for a deal.
Kicking off the day, office-sharing startup WeWork has reportedly engaged in talks to combine with a special-purpose acquisition company, per the Wall Street Journal, in a deal that could take the business public and value it around $10 billion. The SPAC in question is Bow Capital Management, run by the owner of the NBA’s Sacramento Kings, Vivek Ranadivé.
If a deal were to be struck, it would be a surprisingly fast return to the public markets for WeWork, whose disastrous attempt at going public in 2019 left its valuation slashed to a fraction of its original figure. WeWork’s new CEO, Sandeep Mathrani, has also said that he plans to turn a profit for the company sometime in 2021 before revisiting the idea of an IPO.
ROBINHOOD: The popular stock trading app has reportedly raised another $1 billion from existing investors on top of hundreds of millions more in credit as it faces a liquidity crunch sparked by the ongoing trading frenzy.
It’s just the latest chapter in the saga that started with irreverent Reddit investors crusading against short-selling hedge funds. The wild trading made it difficult for Robinhood to pay customers who were owned from trades and offer collateral to clearing facilities. On Thursday, the startup paused the buying of shares in companies such as GameStop, drawing widespread ire from its users and even eliciting lawsuits. “In order to protect the firm and protect our customers, we had to limit buying of these stocks,” Robinhood CEO Vlad Tenev told CNBC Thursday. The company will allow for limited trading of shares of GameStop starting Friday.
Even while the story is posed as one of large investors battling retail players, the narrative is not so cut and dry: The rally in shares of movie chain AMC may have also been a boon to tech-focused private equity firm Silver Lake and credit investor Mudrick Capital Management.
ARE MORE SOFTWARE SPINOUTS ON THE WAY AFTER QUALTRICS’ IPO?: German software maker SAP acquired survey and analytics company Qualtrics for $8 billion roughly two years ago, with the SAP CEO at the time seeking to assuage critics of the pricey deal by likening it to Facebook’s famous acquisition of photo-sharing company, Instagram.
While Qualtrics’ IPO Thursday certainly doesn’t fulfill SAP original intent, the investment has paid off, at least on paper. Shares of Qualtrics rose 51% in their debut, valuing the company at $27.3 billion. SAP plans to maintain a controlling interest in the company.
Term Sheet caught up with Qualtrics Zig Serafin and founder Ryan Smith on Thursday to ask about the thinking behind the spinoff, and Smith had an interesting prediction:
“I think this will be a trend where you will see other companies look at this and say, this is a very good new path for people to IPO,” the chairman said over Zoom. “How many companies have been acquired and then spun out like this in enterprise? Not many. There are a lot of companies within larger ones whose market and category are in hyper-growth… As we looked out almost two years into the SAP and Qualtrics relationship, the real question came to: ‘Are we going to invest heavily under the current economic structure or is there another way we can invest more?’”
SAP has struggled in recent months to appease shareholders seeking growth, with shares of the company staying level through the last year. The Qualtrics spinoff meanwhile has also attracted Silver Lake as an investor.