The Basics:
Too many big names are involved to miss this one. Shaq has teamed up with Ex-Tik Tok CEO Kevin Mayer, Martin Luther King III, and three former senior Disney executives to form the Strategic Advisory Committee of Forest Road Acquisition Corp.
This company is a SPAC (Special Purpose Acquisition Company), which is a “blank check” company formed by investors for pursuing deals in specific sectors. According to their SEC filing, Forest Road is looking for “cutting edge technologies” and “companies in need of capital due to idiosyncratic market conditions.”
Goals of Forest Road Acquisition Corp:
It looks like Forest Road is hunting for new shiny trophies in the tech sector and banking on an upstart company looking for the right investors. With a board of business heads like this working together, it’ll be hard to doubt they find exactly what they’re looking for.
The expected ticker for this SPAC when they announce their listing on the NYSE is “FRX.U; With a public offering price of $10.00. Stick around for the end of this article and you may find something in the interest of your pockets. There’s still a lot of speculation about where Shaq and his advisory peers will be betting their money. Shaq is historically on the money when it comes to early investing, and plenty capable when it comes to managing businesses.
He was an early investor in Google (NYSE: GOOGL) and for the smart doorbell company, Ring, which was acquired for around $1 Billion by Amazon (NYSE: AMZN). All I’m saying is I wouldn’t bet against a Hall of Famer with business instincts.
Why You (Yes You) Should Care:
In a SPAC, investors are looking to raise millions of dollars in a 24 month time period and merge with a firm under a public entity. To make the picture clearer for you Draftkings Inc. (NYSE: DKNG) , an online sports betting company, was one of a few notable recent SPAC acquisitions as of late with a $3.3B valuation once it merged. Similar stories with Uber, Casper, and Blue Apron. SPACs bypass the usual SEC hurdles other IPOs have to tackle and allow companies to enter the public market faster. Which is important for investors to analyze when they’re looking for stocks on the rise.
But here’s why you should care if you haven’t caught the hint, keep your eyes on the lookout for any SPACs on the rise. They are here to stay, that’s a guarantee! Because SPACs are underwritten at affordable prices it becomes that much easier to ride the hype train without falling off the wheels, if you’re smart about handling your finances that is. No good thing is ever all sweet, however; SPACs have their own downsides and risks. What’s for sure is that many eyes will stay locked on whatever company Forest Road merges with in the near future.
