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Opinion
Matt Levine

Big SPAC Deals Don’t Need Big SPACs

Also SPAC warrants, MicroStrategy’s strategy and NYSE NFTs.

One thing about the biggest SPAC deal ever is that it doesn’t involve a particularly big SPAC. Grab Holdings Inc., the Southeast Asian tech unicorn, is merging with Altimeter Growth Corp., a U.S.-listed special purpose acquisition company. The deal gives Grab about a $40 billion equity value, and Grab will raise $4.5 billion. That is sort of in the normal zone for companies going public: In a typical initial public offering, a company might sell 10% to 20% of itself to new investors; here the number is about 11%.

But the SPAC itself — Altimeter Growth — is only a $500 million pot of money. That’s a big pot of money, but not all that big in the context of the modern SPAC boom; the record is Bill Ackman’s $4 billion SPAC. Altimeter’s $500 million SPAC will buy just 1.3% of the public company.  The remaining $4 billion will come from other big investors — including the sponsor of the SPAC — who will invest alongside the SPAC in a PIPE, a private investment in public equity. From the press release: