Sorry Margaret - Dealbreaker

Behold: The Most Incestuous SPAC Deal Yet

Jon Shazar — Thu, 03 Dec 2020 20:50:34 GMT

As we, the SEC and everyone else has noted, there are a lot of SPACs out there these days, and a lot more in the pipeline. Many more, in fact, than have yet found targets willing to consummate a merger, much to the chagrin of Bill Ackman and Meg Whitman. And, annoyingly, asset managers have been taking themselves off the table by merging with each other rather than with a SPAC, which is obviously how it is supposed to work nowadays.

Securing a deal, therefore, requires a bit of creativity, and have Dyal Capital Partners, Owl Rock Capital Partners and HPS Investment Partners ever done so with this extraordinary circle-jerk: In essence, an asset manager that invests in hedge-fund stakes (Dyal) is simultaneously spinning off from its owner (Neuberger Berman) by merging with a SPAC backed by a hedge fund (HPS) that is partially owned by said asset manager, and merging with a second hedge fund (Owl Rock) that is also owns a chunk of, in which Frankestein’s monster the former parent will remain a major investor. Makes total sense, right?

Dyal and Owl Rock said they have been discussing a deal with a special-purpose acquisition company called Altimar Acquisition Corp.
The Wall Street Journal earlier reported on the transaction, which would value the combined asset managers at about $13 billion, according to people familiar with the matter….
Dyal has previously floated the idea of an IPO of one or more of its funds as a possible way to allow its investors the option of monetizing their holdings, the Journal has reported. The transaction being discussed, however, is an IPO of the management company and wouldn’t alter the liquidity opportunities for fund investors.

Of course: Who would want to undertake a complicated financial transaction to benefit them? And who says SPACs are just back-slapping masturbatory nonsense that will end in tears?

Dyal Capital in Talks to Combine With Owl Rock Capital [WSJ]
Ex-Barclays investment bank chairman plans to raise $250 million with blank-check company [MarketWatch]
Australia’s Macquarie to buy Waddell & Reed Financial for $1.7 billion [Reuters via CNBC]

Quibi Lasts About As Long As A Quibi Video

Jon Shazar — Thu, 22 Oct 2020 18:07:04 GMT

Quibi founders Jeff Katzenberg and Meg Whitman knew that had cracked the nut of the next big thing in Hollywood, knew it in spite of the fact that everyone else on the planet didn’t seem to want it, knew they were going to revolutionize things because they knew the Gen Zers and other young people better than they knew themselves. Indeed, no one may have known it yet, but everyone was craving lavishly funded short-form videos to watch on their phones, so much so that they could launch it amidst a pandemic during which no one had to actually leave the room in which their televisions or laptops reside. Alas, the quickest bite of all was Quibi itself, an idea so good that no one would pay to watch it, and so lucrative that none of the 700 million SPACs out there were willing to so much as give it a sniff.

Quibi, the short-form entertainment service for mobile devices, announced on Wednesday that it will shut down, just over six months after its service launched…. The company said in its announcement that it’s making a proactive decision to preserve shareholder equity, and will return the remaining funds to investors. Quibi alerted its investors and employees of the news Wednesday afternoon.
“While we have enough capital to continue operating for a significant period of time, we made the difficult decision to wind down the business, return cash to our shareholders, and say goodbye to our talented colleagues with grace,” Whitman said in a press release. “We continue to believe that there is an attractive market for premium, short-form content. Over the coming months we will be working hard to find buyers for these valuable assets who can leverage them to their full potential.”

Even by her own not-especially-impressive standards, Whitman’s tenure at Quibi was a disaster. The company was a going concern for less time than her campaign for governor of California, and arguably ended even more ignominiously. (Whitman lost that 2010 race to a 72-year-old guy seeking his old job back after 28 years of failed presidential runs by 13 points; Quibi blew through $1.4 billion in just two years and garnered roughly half as many subscribers as Whitman votes a decade ago.) Sorry, Margaret: Looks like you probably should have taken the Uber job.

Quibi officially announces it’s shutting down [CNBC]

Quibi-rella Looking For Hollywood Ending With Prince SPACing

Jon Shazar — Tue, 22 Sep 2020 19:15:00 GMT

Say what you will about Jeff Katzenberg and Meg Whitman—and there are a great many unkind things to say about both of them, and indeed a goodly number of those things have, in fact, been said about them—they are not stupid, and they are not illiterate. Arrogant, out-of-touch, immune to criticism, surrounded by yes men, sure. They may even be intellectual property thieves. But they can see the extremely grim subscriber numbers and, if the e-mails we get from their representatives are any indication, they can also read. And if they can read, they can read more than just articles talking about how bad their Quibi short-form video platform is flopping. Whitman, especially, would seem likely to be aware of the billions and billions of dollars splashing around Wall Street in the form of blank-check companies that literally anyone can and has launched. And perhaps one or more of them would like to buy a $1.75 billion hole filled with content no one asked for or is interested in paying for, and which may eventually be completely upended by Paul Singer? Sure, it doesn’t sound like a very attractive option, but Airbnb doesn’t seem to be available and the number of SPAC suitors in need of a mate continues to grow.

Streaming service Quibi is exploring several strategic options including a possible sale, according to people familiar with the situation… Quibi, which launched its short-form, mobile-focused video service in April, is also considering raising more money or going public through a merger with a special-purpose acquisition company, or SPAC—essentially a blank-check company that helps fund deals….
The company has enough cash on hand to last for the next several months and isn’t in danger of shutting down imminently….

Quibi Explores Strategic Options Including Possible Sale [WSJ]

Quibi Founders Looking To Raise Some Quick Cash

Jon Shazar — Fri, 14 Aug 2020 00:35:00 GMT

You probably don’t think much about Quibi. Unless you are Paul Singer or have a particular affinity for Schadenfreude (as we do), no one does, at least as measured by the number of people who actually pay for the short-form mobile video streaming platform that even fewer people asked for.

But if you’re looking for metrics as to exactly how bad things are beyond the above-mentioned conversion rate and impossibly grim projections based thereon, we’ve got a couple that will fill all of your gloating over the well-deserved misery of others needs right now.

Quibi Chief Executive Meg Whitman has put a condominium in West Hollywood on the market for $6.5 million — the same price she paid for the place in 2018.

Entertainment mogul Jeffrey Katzenberg has sold his Beverly Hills home for $125 million…. The property was never officially on the market. Mr. Katzenberg and his wife Marilyn Katzenberg “had been looking to downsize for some time, and received an offer they couldn’t refuse,” said their spokesman.

Did that time begin when less than a million people signed up for Quibi when it launched (compared to 10 million for Disney+)? When it became clear that less than 100,000 of them would stick around after their three-month trial ended? When the geeks crunched the numbers and realized that Quibi wouldn’t hit even one-third of its paid-subscriber goal by April? And did any or all of those things make them unable to refuse?

Quibi chief Meg Whitman lists West Hollywood condo for $6.5 million [L.A. Times]
Quibi Founder Jeffrey Katzenberg Fetches $125 Million for Beverly Hills Home [WSJ]