Tiger Woods is Launching a SPAC
Tiger Woods is Launching a SPAC
Tiger is the lead investor in a SPAC that just filed for an IPO.
Every Monday, I write a newsletter breaking down the business in golf. Welcome to the 52 new Perfect Putt members who have joined us since last Monday. Join 1,073 intelligent and curious golfers by subscribing below.
Hey Golfers -
Tiger Woods is the lead investor for a SPAC that recently filed for an initial public offering (IPO). The SPAC is named Sports & Health Tech Acquisition Corporation in the S-1 filing.
SPAC stands for ‘Special Purpose Acquisition Company.’ I reached out to a CFO buddy and asked him to explain what a SPAC is in layman’s terms.
SPACs are sort of a step-child of the standard IPO process. Typically when a company IPOs you have a scenario where an existing company is looking for funds. In a SPAC it’s almost the inverse, you have funds looking for a company. With a SPAC you have a publicly traded blank check company that raises money and then has 24 months to find a company to buy.
Here are some quick bullet points about Sports & Health Tech Acquisition Corporation.
Planning to raise $150 million
Shares will be priced at $10 in the IPO
Plans to list on the NASDAQ under the symbol $LDSPU
Incorporated on November 18th, 2021, in the Cayman Islands
According to the S-1 filing, Sports & Health Tech Acquisition is looking to acquire a company with an approximate enterprise value between $600 million and $1 billion. Targeted companies will be in the sports and health technology industries. The S-1 references three verticals Sports & Health Tech Acquisition has identified.
Fan engagement
Consumer-facing health and fitness technologies
Health & well being
Several well-known organizations are referenced in the S-1, allowing us to understand what type of company Tiger’s SPAC could acquire.
Whoop
Oura
Peloton
Strava
Calm
Sports & Health Tech Acquisition’s management team has close ties to Tiger. The CFO is Christopher Hubman. Mr. Hubman has been the CFO of Tiger’s TGR since 2000. Mark Steinberg is listed as Chief Commerical Officer of the SPAC. Mark has been Tiger’s agent for over two decades.
What is most interesting about the management team are two former professional athletes.
Caroline Wozniacki
David Lee
Caroline Wozniacki held the world's #1 ranking in women’s tennis for 71 weeks; she retired from the sport two years ago, making over $35 million on the court. In 2018, Caroline partnered with Lympo, a blockchain-based app that tracks health and fitness goals from wearable devices. Caroline Wozniacki married David Lee in the summer of 2019.
David Lee is a former NBA player and 2x All-Star. He played for five different NBA teams from 2005 to 2017. David made $92 million during his NBA career. After David retired from the NBA, he joined a Venture Capital firm, Social Capital. Interestingly, Social Capital was founded and is currently led by Chamath Palihapitiya — Chamath has been very active in SPACs. I can imagine David Lee will bring solid expertise in this area to Tiger and the management team.
Athletes investing their money in SPACs isn’t necessarily new. Several high-profile athletes are involved with SPACs.
Serena Williams
Shaquille O’Neal
Kevin Durant
Alex Rodriguez
Patrick Mahomes
SPAC deals totaled $370 million in the first three quarters of 2021, more than double in that same period of 2020 — although that may not be a great benchmark data point due to the COVID-19 pandemic. The market is very accepting of blank check SPACs.
Here is the concerning thing. Bloomberg analyzed 33 celebrity-backed SPACs and found that 21 had negative performances in 2021.
The below chart breaks SPACs into two categories.
IPOX-SPAC: SPACs that haven’t acquired or merged
De-SPAC: A group of 25 SPACs that have acquired or merged
SPACs that haven’t merged with an existing company were down 16%. Much less than the group of 25 SPACs, which is down 40% as of December 13th.
A few weeks ago, I wrote a newsletter on the highest-paid golfers of all time. Tiger has earned over $2 billion in his career, while ~95% has come off the golf course. The S-1 filing details Tiger as a true athlete entrepreneur. While we may not know the financial results of Tigers investments and business ventures, he is active in numerous businesses.
TGR Design
TGR Foundation
TGR Live
The Woods Jupiter
The S-1 states that Tiger has made numerous investments throughout the world, including venture capital, real estate, and private equity.
I will leave you with a final thought from an email I received from the same CFO buddy I referenced earlier.
SPACs have been around forever and historically been frowned upon as the rules governing how they go ‘public’ are more lax than a traditional IPO, causing a lack of confidence in the quality of the underlying company. They also use celebrities as ambassadors to help raise funds and general marketing.
I found this comment very interesting, especially if we pair it with the Bloomberg analysis of celebrity-backed SPACs and how they have underperformed the general market.
Athlete investors fascinate me; I will be paying close attention to any news relating to Tiger’s SPAC in the future.
Have yourself a great Monday. Talk to you next week!
Your feedback helps improve Perfect Putt. How did you like this week's newsletter?
If you enjoyed this weeks newsletter, please share it with your friends :)
Great article! I thought we were done with SPACs...but anyhow I hope Tiger finds a good one that doesn't tank back to $0 like most in the last year currently are
Chamath Palihapitiya Is a minority owner of the Warriors. So, his relationship w/David Lee isn’t random. Palihapitiya record with SPACs is mixed, at best -for o/s shareholders. With SPACs, insiders can get significant shares for pennies. Consequently, they can make money , while o/s shareholders lose.
SPACs, when done right, can be an effective vehicle to take a company public. However, like anything else, excess destroys value. Currently, that’s where the market is.