4
Market Monitor Introduction
Introduction
All eyes on SPACs
WELCOME
THE RECENT NEWS involving the floats of Genius Sports and Super Group shows that gaming-related SPAC activity remains in evidence even as the wider market shows something of a retreat from the deal flow highs in the first three months of the year .
That partial pullback looks like a small correction after a period of investor exuberance and suggests there are issues around indigestion rather than a long-term issue with SPACs . Moreover , there is evident envy elsewhere at the success of SPACs in the past year or more .
The latest news from the UK is that the government-supported UK Listing Review will look to put in place measures to make it easier for SPACs to list in the UK as it hopes to catch up not just with New York , but also to stave off more companies looking to Amsterdam .
A pertinent question for the gaming sector , though , is whether there is the investor enthusiasm in Europe for gaming to the same extent that there is in the US . Certainly , the confluence of the burgeoning interest in sports betting and online gaming companies on the part of US investors and the SPAC boom is a mix that isn ’ t currently replicated elsewhere .
Kickstarted by DraftKings , the list of gaming-related SPACs comprises an asyet-select few but more are in the pipeline ( no PIPE pun intended ), with at least half a dozen already listed SPACs that have the intention of looking into gamingrelated areas , including esports .
The parameters of most SPAC transactions , however , are limited in terms of size , meaning that though there is investor willingness to get involved in gaming-related deals , there is a squeeze on the number of targets .
Pricing is key . The basic situation right now is that when it comes to any type of corporate activity or investor liquidity situations , higher valuations are being achieved in the US , whether that is via SPACs , traditional IPOs or one of the various forms of M & A .
This will continue to be the case as long as the climate for gaming in the US is that much more friendly than that in Europe and the UK . How long that situation lasts is an open question right now . And potentially a moot one . For the time being , with the music still playing , there remain a lot of market participants that feel they have to get up and dance . iGB Market Monitor