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Emerging markets have so far been on the fringes of a fundraising boom using so-called SPACs or special-purpose acquisition companies, which could potentially unlock a vital new source of cash for entrepreneurs in developing regions. But the take-off of SPAC fundraisings in these markets hinges in part on the success of a few recently-delayed landmark deals, reflecting wider global investor caution about this funding tool. SPACs allow investors to list a shell company on public markets before they have identified a business to buy, which provides a speedier route to an initial public offering.
In excess of $115.6 billion has been raised via more than 400 SPACS or blank-check companies this year, mainly on Wall Street where SPACs make up two thirds of all Initial Public Offerings (IPOs), although activity has slowed as regulatory and valuation concerns have increased. In contrast, a total of $1.18 billion has been raised this year via six SPACs by emerging market issuers, including two apiece from Israel and China. This is just a fraction of the $96.3 billion raised via traditional IPOs from emerging markets, based on Refinitiv data.
“The explosion and subsequent quenching of SPAC enthusiasm in developed markets provides a potential lesson for emerging markets to learn from,” said Alex Korda, analyst at consultancy The Edge Group.
Jim Osman is neither a growth, nor a value investor. “I am a fundamental investor overall,” Osman said. “I invest in solid companies and particularly in company change.”
One key area of focus are special situations, where an investor will take a stake in a company based on a particular catalyst that carries with it the potential for a significant increase in future value. Such catalysts could include spinoffs, insider buying and management changes. It’s a strategy that works. More than 200 clients, who have a total of $400 billion under management, each pay a minimum of $1,000 a month for special situations research from Osman’s firm, The Edge Group.
When Insider spoke to Osman this time last year, in the midst of the pandemic, he was recommending investors to take advantage of a few emerging themes, with stock picks based off of technological advancements and a younger, more-insular consumer. Equity investors have seen huge returns, as the economy has broadly recovered and the US stock market has continually reaches new highs. Osman is now focused on how his clients can ringfence those profits.
Please join Gary Brode of Deep Knowledge Investing for a discussion with Jim Osman of The Edge regarding special situations investing. Jim will discuss how his firm identifies attractive special situation ideas as well as a couple of his favorite current ideas. Recommended viewing for anyone interested in catalyst-driven investing.
In 2021’s mid-year update, The MoneyShow has featured two of Jim Osman and The Edge’s top conviction ideas – Harley-Davidson, Inc. (HOG) and IAC/InterActiveCorp (IAC). See inside for more details.
Merck’s New Spinoff Organon Shows How Women’s Health Can Provide Fertile Ground For Investment. Here’s Why.
It may be 2021, but the issue of women’s health – especially reproductive rights, birth control and fertility issues – is one which still provokes heated debate and makes headlines around the world. Considering the global women’s health market is predicted to be worth $50 billion by 2025, it seems somewhat ironic that one of the more silent voices tends to be that of Big Pharma.
Heavy hitters are getting out of the game and moving away from investment in the sector, with multi-national pharmaceutical company Merck & Co., Inc. (MRK) Spinning off Organon & Co. (OGN) earlier this month. However, according to analysis from The Edge, it looks like OGN may be the big winner here.
Founded in the Netherlands in 1923, OGN became a world-leading pioneer in contraceptives, and while it’s going back to its roots post-Spin, it has clearly renewed its focus on medical breakthroughs and future-proofing its brand. Stepping into a space which is largely ignored and focusing on ground-breaking contraceptives could be the secret weapon in its armory.
The word “green” is never far from the headlines right now. Talk to any Gen Z’er or millennial and they will list the ways we need to do better for our planet. They’re not wrong, but the kind of “green” Wall Street gets excited about is the color of our dollar bills. Until now, that is. Here at The Edge, we’ve been wondering if it’s possible to save the planet and still make money.
The answer? Yes. The stage is certainly set for climate friendly investments to come into their own. Investors are catching up fast with the power of renewables, and as the world gets into gear with regard to climate change, all the smart money is going on clean energy producers.
A Buried Scandal, Shedding Of Assets, And Forthcoming Spinoff Means Substantial Upside For Bausch Health
Having a troubled past under the name Valeant, Bausch Health Companies (BHC) saw its leverage balloon. The stock price fell over 90% from its high and forced the company to make major changes including a name change, shedding assets to reduce debt, and an upcoming Spinoff of its eye health segment.
The Spinoff was originally expected to be completed by the first quarter of 2021 but has since been pushed to Q3 2021. However, the fact BHC can consider a Spinoff in the first place indicates a remarkable turnaround. The Edge is convinced this is one of the most extraordinary re-inventions of the last few years.
After a year in which the world has become even more reliant on the tech giants, it looks like FAANGs are set to get an even bigger bite of the cherry – as analysis from The Edge daringly predicts.
The global dominance and brand awareness of Facebook, Amazon, Apple, Netflix and Google need no explanation here, but after more than a year of a global lockdown due to Covid-19, consumers have relied upon tech giants more than ever before.
But, as US Government regulators like the FTC and House of Representatives’ Subcommittee on Antitrust continue to have Big Tech and monopolistic practices in their crosshairs, if FAANGs follow The Edge’s playbook, they have at least +50% upside for investors over the next five years.
The game plan? Spinoffs.
On April 6, 2021, The Edge CEO & Founder Jim Osman joined the MoneyShow Virtual Expo to discuss how value catalyst ideas help investors to make returns in volatile markets, as well as highlighting a major call for break-ups at leading tech firms. Please see below for the full recording of the presentation. The slides are available on request.
Wall Streetʼs latest craze for SPACs has reached a new frontier: China.
These so-called blank check companies — which raise money, go public and merge with a private company, typically within two years — have already raised $97 billion in 2021, according to SPACinsider, more than all of last year. And though the vast majority of that money has been raised by American sponsored SPACs, Chinese firms are starting to get in on the action.
But critics say that listing in the U.S. through this trendy shortcut may show something else entirely. SPACs have come under fire because they allow investors to put money into a company with no stated purpose until it finds a target and they facilitate public listings, without requiring private companies to file extensive paper work. “Pre-merger, there are no disclosures,” says Alex Korda, an analyst at New Jersey-based The Edge Consulting Group who has done research on the returns of SPACs over the past five years. “When they say blank check, it is a double entendre — there is no clarity on what type of company they are going to buy.”