Bill Ackman says Airbnb’s first choice is to go the IPO route after the home rental platform denies a $ 5 billion cash injection from his “blank check” company. “

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Reuters / Eduardo Munoz

Location of the checklist

  • Bill Ackman, billionaire hedge fund and activist investor, told Bloomberg TV Airbnb that Bloomberg TV Airbnb’s first choice was to make an initial public offering, but did not entirely rule out a “blank” corporate deal .
  • Ackman explained that the merger with his record-breaking acquisition vehicle would give Airbnb the certainty of $ 5 billion in cash and the ability to go public.
  • But he said the vacation rental app prefers to stick with the traditional route, which means it couldn’t determine how much capital it raises on the last day of the IPO process.
  • “It’s a different approach. You take “behind door number three” as opposed to the bird in hand, “the investor said.
  • Visit the Business Insider homepage for more stories.

Bill Ackman told Bloomberg TV on Thursday that Airbnb’s first choice was to go public, but did not decide not to merge with a special purpose acquisition company.

The activist investor explained that after gaining a sufficient understanding of an attractive company, his SPAC – Pershing Square Tontine Holdings – could inject $ 5 billion in cash and go public with the vacation rental company.

This gives the company a good dose of certainty in raising capital and helps go public within 45 to 60 days, after providing an initial 30-day certainty period, he said.

Ackman said his PSPC has only engaged in a “very preliminary” dialogue with Airbnb, so calling the digital platform’s choice to go the IPO route was not a complete rejection like that. has been reported. He confirmed that there had been no discussions on the assessment.

Deciding to go the traditional route would mean that Airbnb would file a prospectus in December, after the 2020 presidential election. But it would be the “last day of the roadshow” that they would establish how much capital is raised, he said. .

Read more: UBS real estate investment chief told us 5 ways investors can benefit from the transformational pandemic in the way Americans live and work – including real estate markets on the verge of exploding

“It’s a different approach. You take “behind door number three” as opposed to the bird in hand, “he said.

If Airbnb decides to opt for the $ 5 billion merger with its SPAC, it would lead to a “very significant” IPO, Ackman pointed out, adding that apart from Alibaba, Facebook and Uber, the offer did not was also important. a decade.

“If you’re a big company that’s already raised a lot of capital,” he said, “today is sort of a perfect reason why you don’t want to. ”

Airbnb has turned down a merger with Ackman’s SPAC, telling the billionaire it would prefer to enter the market with an IPO. He filed one at the end of August.

Its “blank check” acquisition vehicle, set up only to buy a business, is leading the latest trend sweeping the financial industry.

According to SPACInsider.com, PSPCs raised more than $ 33 billion out of 82 transactions in 2020, easily surpassing numbers from last year.

Read more: One of Tesla’s biggest bulls on Wall Street explains how selling the company’s $ 5 billion stock could benefit retail investors – and why the electric car giant would still be cheap at $ 1,400 per share in 2024

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