Yes We Have a New Name

What’s in a name? Well according to my web advisors, a whole bunch of clicks, hits, whatever they call people having more exposure to our humble blog. But in changing our name to the “Reverse Merger & SPAC Blog” there is more than just traffic building in mind.

As you may have discerned from several recent blog entries or know from direct experience, the SPAC market has simply exploded. Hundreds of SPACs done in the last 3-4 years. Every major Wall Street player now doing it. Why is this important? Because SPACs are part of the RM world. A SPAC is nothing but a public shell company that has a lot of cash in it. Because they raise over $5 million, they bypass SEC restrictions on IPOs of blank check companies. Thus, their stock can trade while they are awaiting a merger.

Technically, we know that SPACs are effectively a sub-industry of reverse mergers, since virtually every SPAC combination is indeed a reverse merger. In the past, there would be a panel on SPACs at reverse merger conferences. Now there are full conferences just on SPACs. So more and more people have referred to the industry as a whole as the “reverse merger and SPAC” space. So, again, even though it implies one is different from the other, we know it is not.

But we also know that names tend to stick- let’s have a little fun with a few industry terms. The term “alternative public offering,” adopted by most industry practitioners to refer to a reverse merger and contemporaneous PIPE, I believe respectfully is a misnomer. It implies there is some sort of public offering, which there is not. It might be called an alternative to a public offering, but alas the industry has overruled my preference for logic and I use the term as well.

Here’s another one: “virgin shell.” My good friends at DealFlow Media coined this term to describe the Form 10 shells that have proliferated in recent years. Everyone immediately adopted the term, including me. Dictionary.com has many definitions of virgin, and I assume DealFlow meant this one: “pure; unsullied; undefiled.” That is an excellent description of the benefits of virgin shells, that they do not have the challenges of “scrubbing” the past one faces with a trading shell that was once an operating business. But definitions of virgin also include “an unfertilized insect.” And of course the most common is the well-known sexual reference. My slight beef is that this last reference could be seen to some as implying inexperienced, unsophisticated, and so on, which is not a good connotation obviously.

So names do matter, as I discussed in my book. I’m obviously not in love with the terms “blank check,” “blind pool” and even “shell company” (I was not pleased when the papers were describing ex-New York governor Elliot Spitzer’s moving money around in shell companies to hide how he was paying for prostitutes). We’ve eliminated “shell promoter” and refer to “shell management” or “shell founders.” Part of the process that we have mostly successfully undertaken to bring our industry out of its long ago past shadows and cement its legitimacy and transparency includes having the right lingo.

So in deference to the tremendous growth of SPACs and the tendency of the industry to refer to them both together, we have changed the name of the blog as you see above. In fact, we also can now be reached at www.SPACblog.com in addition to www.ReverseMergerBlog.com. I will continue to write on all aspects of our growing industry, including shell mergers, virgin shells, SPACs, and other aspects of the small and microcap markets as before. I hope to continue to make you proud of the time you spend here.

Thanks again to all for your incredible support and repeat visits.

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