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Billy Beane And Redbird Capital Form First Sports SPAC
Oakland A’s EVP of Baseball Operations Billy Beane has a reputation as an innovator. He ushered in the sabermetrics, or advanced analytics, era of baseball with the “Moneyball” A’s of the early 2000s. Now, Beane is innovating again — this time in sports finance. Beane has partnered with Gerry Cardinale’s RedBird Capital to offer the first sports SPAC, RedBall Acquisition Corp.
Why It Matters
Less than 24 hours after Rush Street Interactive and its $1.8 billion merger had the SPAC world buzzing, the blank-check company wave continues. Here’s a refresher from yesterday’s Morning Cents:
“Special Purpose Acquisition Companies (SPAC), or blank-check companies, are all the rage right now. They raise money by going public and then have a set period to find an acquisition target. Any SPAC merger is subject to shareholder approval, according to The Wall Street Journal. Nikola Motors, DraftKings, MultiPlan and Fisker have all gone public or agreed to deals by way of SPACs.”
RedBall plans to IPO at $10 per share, with additional warrants available. The company will keep the shareholder money in a trust for two years while Beane and Cardinale search for an acquisition target. One interesting opportunity could be taking sports data firm Sportradar public, which is believed to be exploring its IPO through by SPAC. However, RedBall can’t have discussions with any potential target until it has gone public.
Cardinale’s RedBird fund has an impressive history in the sports world. “Last year it partnered with the Yankees, Amazon and Sinclair Broadcasting in acquiring YES, the regional cable channel that shows the bulk of Yankee games and earlier this month, RedBird acquired French soccer club Toulouse FC,” Sportico writes.
Numbers to Consider
- $500 Million – How much RedBall plans to raise with its initial public offering.
- $13.6 Billion – The total value across 59 SPAC IPOs in 2019.
- $19.2 Billion – The total value across 51 SPAC IPOs in 2020, according to spacinsider.com.
Read More: (SPORTICO)
Facebook Offers Money to Reel in TikTok Creators
Facebook is turning up the heat on TikTok. The Mark Zuckerberg-owned tech giant has offered financial incentives to some of the biggest influencers on TikTok to lure them onto Reels, Facebook’s new short-form video platform built into Instagram. Facebook plans to unveil Reels next month, and the potential payments for some would be in the hundreds of thousands of dollars.
Why It Matters
Facebook’s making a pretty bold move entering the short-form video space, where TikTok’s grip should be unmovable. But the Chinese app has drawn criticism due to national security and privacy concerns, and the Trump administration and several other U.S. lawmakers are mulling the idea of banning or limiting access to TikTok in the U.S.
TikTok’s fall from grace could allow Facebook to walk directly into a winning situation. Reels is basically a clone of TikTok built directly into the Instagram app, which boasts around 107 million active users. When Reels launches, nearly a third of the country will already have the app on their phone, and if any of TikTok’s U.S. audience is up for grabs, Reels could snatch them up rapidly. To counter Facebook’s advance, TikTok announced a fund to help creators on the platform “realize additional earnings that help reward the care and dedication they put into creatively connecting with an audience that’s inspired by their ideas.”
As the short-form video battle rages on, Facebook continues to deal with scrutiny for its competitive behavior. “Snap and other rivals have complained to federal regulators about what they say are Facebook’s efforts to thwart and undermine rivals. Facebook has previously said that its acquisitions fuel innovation and its addition of new services have given consumers more choices,” The Wall Street Journal writes.
Numbers to Consider
- 70 Percent – The share of 10-year-old girls with smartphones in the U.S. that use TikTok, according to Jiminy, an app for parents that measures the smartphone habits of children.
- $200 Million – The size of the creator fund TikTok announced to incentivize its influencers.
- $110 Billion – TikTok parent company ByteDance’s estimated valuation, according to CNBC.com
Read More: (WALL STREET JOURNAL)
Tech’s top CEOs will face Congress in antitrust hearing now set for Wednesday
The long-awaited public showdown between Congress and the CEOs of tech’s most prominent company is set to go down Wednesday after being postponed last week.
Why It Matters
The hearing is the latest piece in the House Judiciary Antitrust Subcommittee’s ongoing antitrust investigation.
“Since last June, the Subcommittee has been investigating the dominance of a small number of digital platforms and the adequacy of existing antitrust laws and enforcement,” House Judiciary Committee Chairman Jerrold Nadler and Antitrust Subcommittee Chairman David Cicilline said in a joint statement. “Given the central role these corporations play in the lives of the American people, it is critical that their CEOs are forthcoming. As we have said from the start, their testimony is essential for us to complete this investigation.”
Read More: (TECH CRUNCH)
A Quick Look
Pfizer Beats Forecasts as Vaccine Trial Enters Final Stage
- Pfizer reported growth in its biopharma division in the most recent quarter, but overall sales dropped amid increased competition in its generic-drug business. The New York City-based pharma company reported $11.8 billion in revenue, an 11 percent decline from $13.3 billion a year earlier.
- Sales grew within Pfizer’s biopharma division, which focuses on developing new drugs. The division saw revenue grow 4 percent to $9.8 billion, a rise from $9.43 billion a year earlier.
- Pfizer’s overall sales were pulled down by a decline at its off-patent drug division, Upjohn. Sales declined 32 percent year-over-year to $2.01 billion. Pfizer attributed the decline to the exclusive U.S. rights to Lyrica, a medication for nerve pain.
- Still, the company surpassed analysts’ consensus forecast of $11.58 billion in total sales, according to FactSet. Pfizer also plans to begin Phase 3 testing of its Covid-19 vaccine candidate, which is being co-developed with BioNTech, this week.
Read More: (WALL STREET JOURNAL)
Worth Your Time
No Surprises: It’s been quite some time since we last heard anything about the Wirecard scandal (well, not really). News broke today, shedding new light on the insolvent payment processing company’s unsavory activity. Both Visa and Mastercard had previously issued hefty fines to the collapsed company for miscoding gambling transactions and had high levels of stolen card purchases and reversed sales. The Wall Street Journal reported that some executives at Visa were concerned Wirecard was a problem since at least 2015. (WALL STREET JOURNAL)
Do It Again: Kodak’s story should probably be different, given it invented the digital camera in 1975 and still managed to go bankrupt in 2012. But the onetime leader in photography sales is gearing up for a rebrand. With the help of a $765 million government loan under the Defense Production Act, Kodak plans to start producing ingredients for generic drugs to wean the U.S. off of relying on countries such as China and India. (WALL STREET JOURNAL)
The Hurting: Even Ronald McDonald is getting squeezed by the pandemic. McDonald’s profit has suffered a “deeper-than-expected drop, as the coronavirus shut restaurants around the globe and forced the chain to spend tens of millions of dollars to help keep its franchisees operating.” (WALL STREET JOURNAL)
Tencent could be the latest Chinese company to exit the U.S. stock market after proposing a $2.1 billion buyout to other investors in its search-engine affiliate Sogou.
Nissan expects its second straight annual loss of more than $6 billion and says sales won’t rebound for another two full years.
The price of carbon credits in Europe has rebounded a from its pandemic-related slide, signaling a hastier demise for coal.
With the pandemic decimating business, celebrity hotelier André Balazs plans to convert some of his higher-end properties into private residential clubs.
The Fed is extending the operation of emergency lending programs, set to expire at the end of September, through the end of December to support economic activity.
A Couple Cents Content
Curious how people view returning to live events? Check out Part Two of my conversation with industry expert Alex Evans. (POST)
Is Bitcoin poised for a spike? Justin Oh discusses. (TIKTOK)