Bitcoin Bull Anthony Pompliano Launches SPAC Targeting Financial Services: 'My Reputation's On This'
Entrepreneur, investor and Bitcoin (CRYPTO: BTC) bull Anthony Pompliano has a new SPAC targeting the financial services sector and perhaps a company dealing with cryptocurrency.
While the SPAC could target the cryptocurrency space, Pompliano said that's not a definite yes.
The SPAC: Pompliano took Pro Cap Acquisition (NASDAQ:PCAPU) public this week, a SPAC that raised $220 million in an upsized offering at $10 each.
Each SPAC includes one-third of a warrant, which will trade with ticker PCAPW. Common shares will trade as PCAP after the units split.
In an interview with CNBC Wednesday, Pompliano said the timing was right to launch his SPAC after being approached by investors for five years.
Pompliano said he didn't see strong demand from the private market until six months ago and highlighted changing regulation as a reason to create the SPAC. The investor also said that there were a lot of good companies created between 2015 and 2020 that may be ready to go public.
The SPAC lists Pompliano as the CEO, director, and sole managing member of the sponsor ProCap Acquisition Sponsor, LLC.
Prior to his current role as founder and CEO of Professional Capital Management, Pompliano was the co-founder and managing partner of Full Tilt Capital, which was acquired by Morgan Creek Digital Assets in 2018.
Pompliano was also managing partner of Morgan Creek Digital Assets from 2018 to 2020. According to his website, he made notable investments in Lyft, Liquid Death, Placer.ai, Coinbase, SpaceX, Airbnb, Reddit, and eToro.
Target Market
Pompliano said the target market for his SPAC is financial services, fintech and places where he can use his media presence to boost the company.
The investor has 1.7 million followers on X, his own show on X, and an investment newsletter read by hundreds of thousands of people.
Pompliano said the SPAC is looking for a cash flow-positive company that has a bright future.
"If you do a good deal at a good price, it doesn't matter who the sponsor is," Pompliano said.
The investor told CNBC that he has "skin in the game" and taking a huge "reputational risk" with the SPAC offering and merger.
Pompliano said his very public figure means that he can't be an SPAC sponsor who sells the shares and disappears, adding, “My reputation's on this."
The plan, he says, is to stick around and create shareholder value for whichever company Pro Cap Acquisition merges with. "This is not a do the transaction and walk away.”
CNBC host Andrew Ross Sorkin asked if many investors are expecting Pompliano to do a crypto-related merger given his experience in the sector.
"We're very interested in financial services," Pompliano said.
The investor said the new digital world is merging with companies like Robinhood and Kraken offering access to public equities and cryptocurrency.
Pompliano said he wouldn't go out and say they are buying a crypto-related company, but wouldn't rule it out, telling Sorkin that most financial services companies are already touching crypto in some way.
The Management Team
Also taking part in the CNBC interview Wednesday was Bausch + Lomb CEO Brent Saunders, who is serving as a special advisor to the SPAC.
Pompliano said he's been friends with Brent for years, which includes Saunders investing in his company. Saunders joined as an advisor for the SPAC.
Along with his experience leading healthcare companies, Saunders has experience in the mergers and acquisitions space, something that Pompliano highlighted in the interview. Saunders has overseen over 80 deals worth $300 billion according to the SPAC's prospectus.
Saunders previously led a SPAC that merged with HydraFacial. The new entity goes by Beauty Health (NASDAQ:SKIN). The merger closed in 2021 and shares trade at $1.56 today, down around 85% over the last five years.
Return of SPACs
Sorkin pressed Pompliano and Saunders about the past negatives of the SPAC market.
Pompliano said SPACs got a bad name because people were doing public venture capital deals with high valuations on companies losing money.
The SPAC from Pompliano comes after a recent offering from two people who helped bring Trump Media & Technology Group public and are now trying to acquire a company in the cryptocurrency space.
Renatus Tactical Acquisition Corp I (NASDAQ:RTACU) recently went public with a $210 million offering. The SPAC counts Eric Swider and Devin Nunes as names involved in the sponsor companies of the SPAC deal.
That offering follows several recent mergers in the cryptocurrency space including Bitcoin holding company Twenty One announcing a SPAC merger with Cantor Equity Partners (NASDAQ:CEP). The company has a target of holding 42,000 Bitcoin. The merger includes backing from Tether, SoftBank Group and Jack Mallers, who will serve as CEO. After the merger, the company will trade as “XXI” on the Nasdaq and could be one of the largest public holders of Bitcoin.
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