Spencer Rascoff, the serial entrepreneur behind Zillow, Hotwire, and Pacaso, is helping fuel the SPAC boom on Wall Street with the IPO of blank-check company Supernova.
The special purpose acquisition company hit the New York Stock Exchange Wednesday and raised $350 million with 35 million shares priced at $10 per share. Supernova is still exploring its merger options, but Rascoff said its target will likely be something within the tech industry.
"We'll be looking for companies worth between about $1 and $5 billion dollars," Rascoff told Cheddar. "It could be in a variety of areas within tech. It could be B2B SAAS. It could be e-commerce, adtech, direct-to-consumer. So we're casting our net pretty wide."
Supernova is just the latest in a string of SPAC offerings this year that is quickly becoming one of the most popular routes to the public market.
Rascoff said there are multiple benefits to choosing a SPAC instead of a traditional IPO.
"One of them is the price discovery," he said. "When you publicly list in a traditional IPO, on average tech companies now trade up 43 percent by the end of the first day. So they're leaving a huge amount of money on the table when they go public traditionally."
Another is speed, simplicity, and mentorship.
"A traditional IPO process takes almost a year," Rascoff said. "There's a lot of market risk and complexity, but if you go public by merging into a SPAC it's just a matter of a couple of weeks."
He also touted Supernova's lineup of experienced entrepreneurs and managers, including ex-Blackstone executive Robert Reid, Michael Clifton of The Carlyle Group, and hedge fund manager Alexander Klabin.
The appeal for investors is "optionality," he said. They invest based on the experience of the people behind the SPAC, but then they get a chance to basically bail out once the merger company is announced.
"SPAC investors are drawn to SPACs because for them it's a way to get sort of an early in on a potential IPO," he said. "For example, the investors that bought into the Supernova IPO are essentially betting that my team and I are going to go and identify a great target and merge into that company or have that company merge into us, and therefore they'll end up with sort of a toehold in that newly public company."
Stephen Kates, Financial Analyst at Bankrate, joins to discuss the Fed’s 25-basis-point rate cut, inflation risks, and what it all means for consumers and marke
Big tech earnings take center stage as investors digest results from Alphabet, Meta, Microsoft, Amazon, and Apple, with insights from Gil Luria of D.A. Davidson
Disney content has gone dark on YouTube TV, leaving subscribers of the Google-owned live streaming platform without access to major networks like ESPN and ABC. That’s because the companies have failed to reach a new licensing deal to keep Disney channels on YouTube TV. Depending on how long it lasts, the dispute could particularly impact coverage of U.S. college football matchups over the weekend — on top of other news and entertainment disruptions that have already arrived. In the meantime, YouTube TV subscribers who want to watch Disney channels could have little choice other than turning to the company’s own platforms, which come with their own price tags.
President Donald Trump said he has decided to lower his combined tariff rates on imports of Chinese goods to 47% after talks with Chinese leader Xi Jinping on curbing fentanyl trafficking.
Universal Music Group and AI platform Udio have settled a copyright lawsuit and will collaborate on a new music creation and streaming platform. The companies announced on Wednesday that they reached a compensatory legal settlement and new licensing agreements. These agreements aim to provide more revenue opportunities for Universal's artists and songwriters. The rise of AI song generation tools like Udio has disrupted the music streaming industry, leading to accusations from record labels. This deal marks the first since Universal and others sued Udio and Suno last year. Financial terms of the settlement weren't disclosed.
