The New Yorker Magazine (№ 7th June 2021) by David Remnick (Editor In Chief)

Author:David Remnick (Editor In Chief) [Remnick, David]
Language: eng
Format: epub
Tags: culture, politics, art, jounalism, magazine, non-fiction
Publisher: Conde Nast
Published: 2021-06-06T14:00:00+00:00

with a SPAC, or are working toward a I.P.O., given the regulatory issues sur-junk bonds. Palihapitiya, meanwhile, has

merger. Some of those companies would rounding its business—went public via indicated that he’s searching for new likely go out of business if they couldn’t a SPAC, and its stock has more than dou-SPAC opportunities. “I don’t know if

sell shares to the public; building elec-

bled. Right now, Klausner said, SPACs Chamath’s SPACs are going to look smart tric vehicles is enormously expensive, are a “minefield.” Even so, “we need al-or horrible when the reckoning comes,”

and automotive startups need reliable ternatives to I.P.O.s, and once the pub-the banker said. “But we needed that

sources of capital. But it would be nearly lic learns how to price and understand kind of blind arrogance and raw nerve impossible for many of them to mount the risks, and there’s more transpar-to convince people to give this a chance.

a traditional I.P.O., given the compa-

ency about costs and who is making Without that, who’s going to take a risk nies’ riskiness and the fact that most ludicrous projections and who is being on something like this?”

won’t show profits for years. Klausner, responsible, this will be a normal part the Stanford professor, said, “Our econ-of business.”

omy depends on finding ways to match

That transition will likely involve Palihapitiya insists that he does not tell stories; rather, he says, he reveals

risk-taking companies with risk-tak-

forcing sponsors to accept smaller pay-

truth discovered through careful delib-

ing investors.”

ments and making the costs borne by eration, hard work, and unbiased rea-Firms often can’t go public because shareholders more transparent. The soning. He told me, “I think why peo-of complicated tax situations, or because public will become savvier about prom-ple want to work with me is because I

they’re too cutting-edge to be easily un-

ises of riches and novelty. In an e-mail, do a reasonable job, and it’s gotten bet-derstood, or because their industry is Klausner wrote, “I would be in favor ter over time, of being able to dial down out of favor, or because they operate in of a SPAC in which the sponsor’s com-bias, dial up facts and intuition.” Coun-

legal gray areas, such as marijuana dis-

pensation is lower and tightly tied to tering the notion that he offered sim-tribution. For companies without easy shareholder returns. There have been plistic pitches to the public, he argued access to private funding, a SPAC can a few SPACs in recent months that are that complex explanations are distract-fill a gap—say, matching enthusiastic starting to approach this sort of iming: “The problem that I think happens

weed investors with industrial Maui proved structure.”

sometimes is, when you’re trying to make

Wowie growers, and offering the nec-

Before too long, one investment important decisions, a lot of the times essary due diligence and infrastructure banker told me, the current SPAC bub-people make them exceedingly compli-

that such a transaction requires. Last ble will pop, and investors may lose lots cated, and it’s almost to get other peo-year, the online-sports-wagering com-

of money. The marketplace will likely ple’s validation.

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