If you thought SPACs “Special Purpose Acquisition company” were just for small time managers acquiring start ups you’d be mistaken as even Goldman Sachs has its eyes on deals with NYSE GSAH-UN, Goldman Sachs Acquisition Holdings Corp II which operates as a blank check company.
What most people are not aware of is this is not there first SPAC, there was a merger recently performed by Mr. Knott who led Goldman Sachs’ co-sponsorship of GSAH I from its initial public offering in June 2018 to its merger with Vertiv in February 2020 how ever he will be replaced for this upcoming merger.
When one of the largest banks in the world is starting a SPAC it wouldn’t be the worst idea to add it to your watch list. I am extremely curious myself just to see what kind of companies there interested in acquiring for 700 million dollars!
Everything We Know About The Goldman Sachs SPAC
- Initial public offering of 70,000,000 units at a price of $10.00 per unit.
- Sponsored by GS Sponsor II LLC, an affiliate of The Goldman Sachs Group, Inc.
- listed on the New York Stock Exchange ( NYSE GSAH.U ) beginning June 30, 2020. At a price of $11.50 per share
- Goldman Sachs & Co. LLC and Citigroup Global Markets Inc. are serving as the joint managers for the offering.
This SPAC as a $700 million, 24 months, 1/3 warrant deal, which is keeping in line with other deals of similar statures.
There primary focus will likely be in the financial space making it less popular and largely overlooked, especially with no merger date announced this could be a sleeper stock for a few years. How ever this doesn’t mean the management team should be overlooked with past experience and backed by Goldman Sachs here’s what we know.
SPAC Stock GSAH-UN Managing Team
Mr. Knott led Goldman Sachs’ co-sponsorship of GSAH I from its initial public offering in June 2018 to its merger with Vertiv in February 2020, The biggest concern is they will be replacing the past managers for this new SPAC deal. This is nothing new for Goldman Sachs as they have done a good job selecting the right people in the past, which is a good sign for a future acquisition.
“As demonstrated in GSAH I’s merger with Vertiv, the experience and operating capabilities of an executive partner can be an important component for a successful business combination in certain situations. We intend to recruit an executive who has the specific operating capabilities and experience needed by the target of the initial business combination to replace Mr. Knott and Mr. Agus. At this time, we believe retaining the flexibility to match the executive partner with the right capabilities and experience to the eventual, specific target company allows us to evaluate opportunities and situations across the broadest range of sectors and will enable us to deliver the best initial business combination for our Investors.”
So far there is a lot of unknowns around this SPACs management team which will be the leading concerns amongst investors. Now the best thing this SPAC has going for it is it won’t be a small acquisition and it’s backed by Goldman Sachs but is it a buy?
Is GSAH-UN Stock A Buy?
When buying SPAC stocks its important to remember this invested money sits in a holding account with limited investment exposure allowed to institutional buyers. Basically meaning there is less volatility, so when it comes to SPACs with no merger dates your betting on the management team. If they fail to acquire a company with in 2-3 years you will simply receive the fair value of your invested money back and the fund closes.
SPAC stocks do not operate like other investments and this has to be considered when looking at Goldman Sachs GSAH-UN. Unlike other SPACs that have announced merger dates for example “Hyliion Ticker SHLL” there will be less attention focused around this leading to poor short term performance.
GSAH-UN Stock is a pure management team play, backed by Goldman Sachs and Unfortunately with lack of direction in acquisition for now patience will be required for any future acquisition.
The SPAC Stock Hype
There has been a lot of attention around recent SPAC stocks going public and it’s a likely wave of attention here to stay. As most investors have been completely oblivious some have been seeing this as a huge opportunity to own companies before they go public. Doing so has lead to some healthy returns with recent mergers in Nikola & Virgin Galactic dragging in more attention, in which has recently popularized the world of special purpose acquisition companies!
Every investor should consider educating themselves on SPAC stocks as you may find an investment opportunity interesting enough to own before going public and you can learn more here.
Get the Latest SPAC News