CBx Daily

SPACs Are Going All Black With $126.5 Million IPO Move

Sep 20

By CultureBanx Team

  • Minority Equality Opportunities Acquisition $126.5M SPAC is the first Black-led SPAC listed on the Nasdaq
  • In 2021, SPACs have raised $122B in IPOs so far

Minority Equality Opportunities Acquisition (MEOA) is ready to buy up Black-owned companies with its $126.5 million special purpose acquisition company (SPAC). It plans to grow, gain new capital, and flourish through mergers and acquisitions. Led by Shawn Rochester, MEOA’s CEO, along with Robin Watkins, its CFO, they will specifically target historically undercapitalized MBEs and Black businesses across various sectors, since many of those companies often suffer from insufficient capital to make a major splash in their industry.

Why This Matters: For reference, a SPAC is a company with no business operations, set up for the sole purpose of raising capital through an initial public offering with the goal of buying an existing organization. MEOA will be using its SPAC to acquire culturally competent business leaders, committed to strong growth models. Also, this transaction makes it the first Black-led SPAC listed on the Nasdaq, trading under the ticker symbol “MEOAU,” according to the company.

SPAC mania had taken hold of the public markets in 2020, these types of IPOs raised almost twice as much money as they did in the previous 10 years combined, and had already surpassed 2019 levels by March 2021. As of September 2021, SPACs have raised $122 billion in IPOs in the U.S.

Situational Awareness: With the popularity of blank check companies comes increased scrutiny, because SPACs raise cash in an IPO and then have two years to search for a private company with which to merge and thereby bring public. The primary source of SPACs’ high cost and poor post-merger performance has caused regulators to raise questions related to erratic disclosures and anemic protections for investors.

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