One-time 'SPAC King' Palihapitiya launches new blank-check vehicle with plan to 'temper' retail fervor

Chamath Palihapitiya, erstwhile dubbed Wall Street's "SPAC King," is backmost with a caller blank-check conveyance and a committedness to bash amended aft a bruising way record.

Palihapitiya connected Monday launched the American Exceptionalism Acquisition Corp. A (AEXA), a $345 cardinal SPAC that helium said was much than 5 times oversubscribed, drafting $1.4 cardinal successful demand. The vehicle, which volition commercialized connected the New York Stock Exchange, is designed to people companies successful AI, energy, defence and decentralized finance.

"These are areas wherever I judge American entrepreneurship tin inactive pb the world, and wherever a disciplined, institutionally backed conveyance tin adhd value," the 49-year-old the Social Capital CEO and former Facebook executive said in a station connected X.

The SPAC was up 3% successful aboriginal trading Tuesday.

Palihapitiya erstwhile helped ignite the SPAC roar among retail investors during the pandemic successful 2020, but his archetypal question of deals mostly pb to mediocre returns. Virgin Galactic mislaid much than 90% of its value, portion Clover Health trades astir lone $3 compared to the $15 highest aft regulatory scrutiny and a short-seller report. Opendoor, which had fallen into a penny banal earlier this year, became a meme sanction supported by retail traders, but the banal is inactive astir fractional of its grounds terms successful 2021.

SPACs are special intent acquisition companies, which rise superior and usage the currency to merge with a backstage institution and instrumentality it public, usually wrong 2 years.

Now, Palihapitiya said AEXA is structured differently. The SPAC volition transportation nary warrants, and his compensation vests lone if shares emergence astatine slightest 50% aft a deal. Meanwhile, conscionable 1.3% of the allocation went to retail investors, helium said.

"I privation to temper retail investors' engagement with my SPACs," helium said. "This woody was built for organization investors. Specifically, 98.7 percent went to ample institutions, each picked explicitly by me."

Palihapitiya's instrumentality comes arsenic helium has recast himself some politically and publicly. A longtime Democrat donor who erstwhile floated a tally for California governor, helium has much precocious aligned with President Donald Trump's politics. At the aforesaid time, helium has built a media level done the All-In Podcast, wherever helium and different tech investors statement authorities and markets, often favoring the views of the Trump Administration.

SPACs are having a resurgence aft a sharp, two-year slowdown as regulatory scrutiny, disappointing post-merger show and rising rates dampened capitalist appetite. Many SPACs liquidated alternatively than find deals, and the erstwhile red-hot assemblage became a cautionary tale. Now, with accepted archetypal nationalist offerings returning and the broader banal marketplace charging ahead, dealmakers are dusting disconnected the structure.

"No 1 tin foretell what volition hap successful the aboriginal truthful beryllium harmless retired determination and nary crying successful the casino," Palihapitiya said.