Basketball Star Kevin Durant Bets on SPAC Market
Durant’s SPAC Files to Go Public
Kevin Durant, the Brooklyn Nets basketball star, is backing a blank check company, joining a growing list of celebrities who have also used this business strategy. In recent months, hip-hop star Jay-Z, tennis pro Serena Williams, and basketball legend Shaquille O’Neal have all become involved with SPACs.
Durant is becoming Co-CEO of Infinite Acquisition Corp., which filed to go public under the symbol, “NFNT.” The blank-check company is aiming to raise as much as $200 million, selling 20 million shares at $10 per share. If the SPAC does not acquire a company to take public in 18 months, investors get their money back. Durant’s SPAC is targeting companies in sports, ecommerce, and crypto.
Thirty Five Ventures and LionTree Back the SPAC
Blank check companies raise money from investors which they then use to buy companies. Investors generally put money into a SPAC before they know its acquisition target. Durant is no stranger to investing. In 2016 the basketball star, along with Infinite Acquisition Co-CEO Rich Kleiman, founded Thirty Five Ventures. Half of Infinite’s backing is coming from Thirty Five Ventures. The other half is from LionTree, a bank. Durant and Kleiman also invested in SeatGeek’s SPAC deal.
Durant is entering the SPAC market at a time when it is cooling down due to stricter accounting rules and increased scrutiny by the Securities and Exchange Commission. But this year has been a big one for SPACs—more than $100 billion worth of blank check deals have taken place in 2021.
Investor Interest Turning
Unlike some of the other celebrities who take a seat on the board of a SPAC or make a passive investment, Durant plans to play an active role as co-CEO of the company. The basketball star’s bet may pay off, as some signs are emerging that investors are getting excited about SPACs again. An ETF which tracks publicly traded SPAC companies is up 8% during the past month, though it is still down 14% for the year.
Investing in SPACs has been a wild ride this year. While the market is down it is not out. It will be interesting to watch how investor interest in SPACs evolves as more celebrity-backed blank check companies go public.
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