23andMe to merge with VG Acquisition Corp. to become publicly-traded company

Re:23andMe to merge with VG Acquisition Corp. to become publ... by anthuswilliams on Friday February 05, 2021 @10:15AM (#26037177)

The sponsors of the SPAC set aside for themselves a big chunk of the shares of the newly combined entity. So in general, the company gets a worse price than it would if it had gone public via an IPO.

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Re:23andMe to merge with VG Acquisition Corp. to become publ... by buescher on Friday February 05, 2021 @10:37AM (#26037447)

So if the principals involved in a startup set up their own SPAC to take the company public, they could screw minority shareholders in the original company like, say, employees?

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Re:23andMe to merge with VG Acquisition Corp. to become publ... by ls612 on Friday February 05, 2021 @12:06PM (#26038499)

The laws generally require that these things be “arms length transactions”, basically meaning that the two parties are legitimately at odds over the price. Your example would not be that.

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Re:23andMe to merge with VG Acquisition Corp. to become publ... by smallscientist on Friday February 05, 2021 @12:43PM (#26038974)

Most sponsors don't hold shares unless for the stock pops way beyond the $10. For the average company, you may end up as a public company with no cash raised. This can be mitigated by a concurrent PIPE, but otherwise you're SOL.

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