Amelio's SPAC Upside the Head

SPAC that went splat

How ex-Apple CEO Gil Amelio raised $173 million - and lost almost all of it.

By Adam Lashinsky
senior writer

(Fortune Magazine) -- Normally investors make decisions based on close evaluation of the fundamentals underlying a company. In a SPAC, or special-purpose acquisition corporation, popular Wall Street vehicles whose organizers raise money to spend on yet-to-be-determined targets, investors buy solely into the pedigree of the founders.

Which is why they were so quick to pour $173 million into Acquicor, a SPAC formed in 2005 by a supergroup of Apple (AAPL, Fortune 500) alumni - co-founder Steve Wozniak, former CEO Gil Amelio, and ex-senior executive Ellen Hancock. Instead, the trio turned that cash into a highly indebted company whose equity today is worth $15 million.

In early 2007, Acquicor bought a Southern California chip company called Jazz Semiconductor for $253 million (after returning $33 million to shareholders who wanted their money back instead). But the timing was terrible. Jazz sells to wireless companies like mobile-phone makers, who have been in a nasty downturn. Shares of Acquicor - renamed Jazz Technologies (JAZ) - have cratered from their IPO price of $6 to a recent 71 cents per share. On Feb. 13 the company retained UBS to explore "strategic alternatives."

Read more >>> CNN

Nasdaq-Amex SPAC-down!

Nasdaq wants piece of Amex's lucrative SPAC market

Wednesday, March 5, 2008

At this time last year, the Nasdaq was the happening place for a new company to come out. The exchange greeted 22 initial public offerings in January and February 2007, while the NYSE and Amex both saw new entrants in the single digits.

This year, the picture looks totally different. Only five IPOs have appeared on the Nasdaq, compared to four on the NYSE and 10 on Amex. The reason for the Amex's dominance is simple: special purpose acquisition companies, or SPACs.

SPACs are shell companies that come public to raise money in order to buy another company. They started popping up on bulletin boards in 2003, and the Amex started taking them in 2005. Now, they've turned into big business. Last year, they consumed 25% of the IPO market, according to Renaissance Capital.

Read more >>> Tehran Times

See also >>> NYSE Amendment to Allow for SPAC IPOs (NYX, NDAQ)