Bill Ackman Expresses Interest in Taking Part of X Public, Formerly Known as Twitter

Hedge fund manager and activist investor Bill Ackman has expressed his interest in a potential deal with Elon Musk’s X, formerly known as Twitter. Ackman’s special purpose acquisition rights company (SPARC) has received regulatory approval to merge with a private company looking to raise at least $1.5 billion. While Ackman has not reached out to Musk and is uncertain about X’s interest, he believes the social media company’s heavy debt load could make it open to the deal.

This is not the first time Ackman has pursued a deal through a SPAC. In 2020, he raised $4 billion for a blank-check company with the intention of acquiring a 10% stake in Universal Music Group, the world’s largest record label. However, the complex transaction faced concerns from the Securities and Exchange Commission, leading Ackman to liquidate all shares in 2022 and return the funds to investors. He has now purchased warrants for his new SPARC.

While SPACs have gained popularity as a vehicle for public listing, they also come with risks. Companies like Lucid Motors and Grab, which went public through SPAC mergers, have seen their share prices decline significantly since their debuts. Additionally, the average performance of companies that went public via SPACs in 2021 and 2022 has been below IPO prices.

If part of X were to go public again, it would likely be valued lower than the $44 billion Musk paid to take the company private. X has faced challenges, including a decline in revenues and concerns over content on the platform, which have affected advertiser confidence. The company’s heavy debt may also pose a challenge for public investors.

SPACs have faced increased regulatory scrutiny, and the tightening monetary policy has made it more challenging to raise funds and find suitable merger targets. As a result, fewer SPACs have gone public in recent years. Ackman’s interest in X highlights the ongoing dynamics and uncertainties surrounding SPAC deals.

Overall, while Ackman’s interest in taking part of X public is noteworthy, the outcome and success of such a deal remain uncertain.