Chamath Palihapitiya is returning to the blank-check game after throwing in the towel in 2022 on a pair of jumbo firms that failed to find targets.
The former Facebook executive who became the public face of the SPAC mania during the original boom-and-bust filed late on Monday for a US$250 million initial public offering for American Exceptionalism Acquisition Corp A, joining the ranks of sponsors giving special purpose acquisition companies another go. The blank-check firm will seek to bring a company that can benefit from Palihapitiya’s “historical areas of business expertise,” according to the filing.
The one-time SPAC King who raised 10 blank-check vehicles — four of which never completed deals to take companies public — comes back as the industry’s post-crash revival gains momentum, fueled by a wave of crypto deals as well as sponsors linked to President Donald Trump’s family. More than US$16 billion has been raised across 81 SPACs this year, data from SPAC Research show, with the total value already eclipsing the total combined for 2023 and 2024.
Brandon Lutnick — the son of billionaire US Commerce Secretary Howard Lutnick — has pushed Cantor Fitzgerald to lean in on SPACs, advising on them as well as sponsoring them, while other serial backers including Betsy Cohen have also returned to the arena.
The structure of Palihapitiya’s proposed blank-check company is meant to provide greater alignment with shareholders’ interests, he wrote in a letter to investors in the filing.
The deal will not have warrants, a type of sweetener that enticed IPO buyers in the past by potentially offering them extra shares, the filing shows.
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The SPAC will award founder shares — a feature that gives the main backer the chance to receive stock for pennies — though the deal has to perform well to pay off. Palihapitiya’s letter explains that the deal comes with a so-called promote of 30%, which is larger than the typical 20%, but it only vests if the shares reach at least a 50% premium to the US$10 IPO price after the completed deal.
The firm’s sponsor, AEXA Sponsor LLC, agreed to contribute US$1.75 million to buy 175,000 Class A shares at US$10 apiece in a private placement that will close simultaneously with the IPO, the filing shows.
Palihapitiya warned in the letter that retail investors should stay away unless they can afford to lose their entire investment and they’re willing to “embody an adage from President Trump that there can be ‘no crying in the casino.’”
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Of Palihapitiya’s six SPACs to complete deals, only SoFi Technologies Inc is trading above its US$10 IPO price. The others have seen median losses of 75%.
Banco Santander SA is leading the offering, the filing shows. The SPAC is expected to trade on the New York Stock Exchange under the symbol AEXA.
